Turkey's economic growth outlook looks stronger than that of the largest developing economies, a senior figure from Moody's ratings agency told Anadolu Agency on Wednesday.
Alpona Banerji, Moody's vice president and senior credit officer, said: "We affirmed Turkey's rating at Baa3 with a negative outlook in December.
"The first pillars that drove the affirmation are the size, strength and the diversity of its economy, and the fact that its growth prospect relative to other large emerging markets still remains robust," Banerji said.
Banerji said that the ratings agency expects Turkey's growth in 2015 to reach almost 4 percent and 3.4 percent for the year.
This would be based on "the strong carry-over effect from last year, the consumption growth driven by the minimum wage increases and some support from net export contribution driven from trade with Europe," she added.
Banerji listed some other factors supporting Moody's rating affirmation as being "Turkey's fiscal metrics" like its debt-to-gross domestic product (GDP) ratio, which has been stable and is expected to stand at 34 percent for last year.
Banerji pointed out some of the factors that are challenging the Turkish economy, such as "the large current account deficit" and "geopolitical risk."
"Geopolitical risks remain, and the spillover is domestic security issues that might have an impact on tourism, the confidence channels and consumption.
"This could be a drag on economic growth. Though there has been a little rebalance from the current energy and commodity price environment, Turkey's current-account deficit is still large compared to other emerging markets with the country quite vulnerable to global market changes [and] investor perception towards emerging markets," Banerji said.
She pointed out, however, that Turkey's current account deficit has been rebalanced from a peak of 7.9 percent of GDP in 2013 down to 4.5 percent of GDP in 2015.
"There has been a substantial rebalancing on [the] current account deficit mainly led by the oil price decline, but capital account financing remains volatile and a vulnerable," Banerji said.
According to Banerji, inflation, which Moody's expects at 8 percent at the end of the year in Turkey, remains above the 5 percent target set by the central bank due to the depreciation in the Turkish lira against the dollar, high food prices and minimum wage increases.
In addition, Moody's now expects Turkey's real GDP to grow at 3.4 percent in the year and 3.2 percent for 2017. I
