The decisive victory of the Justice and Development Party (AK Party) in the Nov. 1 parliamentary elections will be a positive development for the economy, credit agency Moody's said in a note on Monday. Moody's said the victory of the AK party, which enables it to form a government on its own, would reduce the political uncertainty in the short-term, which has been a major obstacle to economic development in the country since the last elections.

The country's credit quality will be dependent on the government's economic policy strategy, and on how the government seeks to resolve challenges such as increasing growth and reducing inflation, Moody's said. In line with this, Fitch, another International ratings agency, said the Turkish sovereign rating, which stands at an investment grade BBB-, could improve if the new government implements reforms that promote "durable" economic growth. Moreover, Moody's highlighted that reforms aimed at increasing the savings ratio and managing the current account deficit would be vital to building up investor confidence and in supporting the Turkish lira. Moody's is expected to announce its next review of Turkey's credit rating on Dec. 4.