Turkish business world sees no reason for Fitch to downgrade Turkey's rating

Representatives of the Turkish business world have emphasized that there is no reason to downgrade Turkey's Fitch rating, which is expected to be announced by the U.S.-based credit rating agency on Friday, stressing that regardless of the outcome, Turkey will continue to pursue operations confidently for the benefit of the country and the Turkish economy.

Independent Industrialists and Businessmen's Association (MÜSİAD) Chairman Nail Olpak said Turkey's progress in terms of economic growth has been positive despite multiple setbacks due to terrorist attacks inside and outside the country since 2013, adding that in this context, Fitch does not have any theoretical data that would warrant the downgrading of Turkey's credit rating.



Asserting that when institutions like Fitch, Moody's, and Standard and Poors (S&P) make such decisions and lower a country's credit rating, it has a ripple effect on all aspects of the economy; namely, increasing the national debt and the debt of borrowing corporations, resulting in the kinds of economic crises we have witnessed in many countries recently. Olpak pointed out that, "In the past, we have seen Turkey's international reputation stand strong in the face of such decisions by the said institutions, untarnished by misguided decisions which are incompatible with economic benefits. For this reason, if Fitch downgrades Turkey's credit rating on Jan. 27, we will have to evaluate their decision in a calm manner."

President of the Turkish Exporters' Assembly (TİM) Mehmet Büyükekşi stated that the Turkish economy has been performing well despite the weak global economy and numerous difficulties faced in the past year, suggesting that Turkey has outperformed a number of world superpowers, particularly among EU member states, with an average growth rate of 2.2 percent in the first three quarters of 2016.

While Büyükekşi noted that Turkey's tourism sector experienced losses in the third quarter of 2016 due to terrorist attacks and the treacherous July 15 coup attempt, he also emphasized that, considering the year in general, neither production nor export showed signs of disruption.

İbrahim Çağlar, president of the Istanbul Chamber of Commerce (ICOC), has invited Fitch to analyze the real sector's perspective towards investment accurately, saying, "I do not believe that Fitch, S&P or Moody's will objectively put the expectations of the private sector into their investment rating calculations."

Stating that the capital adequacy ratios of banks in Turkey are sound and the economy continues to grow, Çağlar said, "While the Central Bank of the Republic of Turkey (CBRT) responded to the attacks in the exchange rate with a calm stance, Parliament took a very important step with the constitutional amendment. After this great transformation, Turkey will be one of the most important actors in the reshaping of the 'new world order.'" Anatolian Businessmen's Association (ASKON) Chairman Mustafa Koca said it is unfortunate that an official from Fitch would suggest downgrading Turkey's ratings, adding that Fitch has lost its objectivity.

Koca noted that analyses of these organizations usually have subjective dimensions and the investor does not always take them fully into account, saying, "Future projections of the country may not be what they point out. I do not think it will have a very high impact, even if the ratings are downgraded from this perspective," Koca said.