Fitch upgraded Turkey’s credit outlook to positive from stable…

- Fitch announced that it upgraded Turkey credit outlook to positive from stable.

- Fitch stated that the revision in Turkey’s outlook reflects it strong economic recovery, increasing confidence to the macroeconomic transformation and improving public finances.

- The agency also mentioned that there is some uncertainty whether Turkey can grow robustly without generating significant imbalances.

- Fitch foresees Turkey’s budget deficit to GDP ratio at 4.0% in 2010 and 3.2% in 2011.

- With this outlook upgrade Turkey’s credit outlook became positive for all rating agencies (Fitch, S&P and Moody’s).

- However, we think that Fitch’s outlook upgrade is more important to any other rating agencies’ Turkey outlook, since it is the only agency that rates Turkey just one notch below the investment grade. Please recall that Moody’s and S&P rate Turkey two notches below the investment grade.

- A positive outlook from Fitch means that Turkey could get its first investment grade credit rating despite its growing current account deficit in the next 12 months.

- We foresee that if the current account deficit risk is maintained, Fitch could upgrade Turkey to investment grade immediately by Fitch after the general elections, which will be held in the second week of June 2011. An investment grade credit rating should give a boost to Turkish financial assets. (Fitch, Reuters, BGC Partners)

Kaynak: Gelişim Platformu Finans Topluluğu