Automotive Exports December 2019

Fitch affirms Turkey’s debt rating as
‘BB’ changing outlook to ‘stable’
The international credit rating agency,
Fitch affirmed Turkey’s long-term
foreign and local currency Issuer
Default Ratings (IDR) as “BB,” changing
the outlook to “stable” from “negative.”
The agency also revised up its GDP
forecast for 2019 by 0.8 percentage
points to 0.3% on the back of stronger
second-quarter outturns.
Fitch maintained its GDP growth
forecast of 3.1% for 2020 and 3.6% in
2021. Earlier in September, an expert
from Fitch had said Turkey executed a
“very impressive” bounce back from the
challenges it faced last summer.
“Turkey has shown a very impressive
resilience, flexibility, and recovered and
stabilized from the financial crisis of
last summer,” Ed Parker, Fitch Ratings
managing director for Europe, Middle
East, and Africa EMEA region, told a
global conference in London.
Pointing to Turkey’s strong
fundamentals, Parker said the
country’s sovereign balance sheet, low
government debt and private banks are
in relatively good shape.
He also praised the dynamism and
flexibility of the Turkish private sector.
Economists expect fall in interest rates
Economists surveyed predicted that the
Central Bank of the Republic of Turkey
(CBRT) will further reduce interest
rates. The Monetary Policy Committee
(MPC) will hold a meeting for the
seventh time this year to determine the
bank’s decision on interest rates.
A group of 14 economists expect an
average drop of 100 basis points in
the one-week repo rate – the lowest
estimate at 50 basis points and the
highest at 200.
In the previous meeting, the MPC
decided to cut interest rates by 325
basis points from 19.75% to 16.50%.
After meeting, the bank will hold one
more committee meeting this year.
In 2018, the CBRT held nine MPC
meetings as interest rates climbed
from 8% to 24% over the course of the
year.
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