2018 outlook for Turkish companies ‘negative,’ Moody’s says

International credit rating agency Moody's said Wednesday that the 2018 outlook for companies in Turkey is negative, although the stable outlook of non-fiscal companies in the surrounding region is being supported by increased oil prices and continued public spending.

"Limited clarity on policy direction and on the pace of implementation of structural economic reforms, as well as political risks and high currency volatility drive the negative 2018 outlook for Turkish companies," said a senior analyst at Moody's.

In Moody's latest "Non-financial corporates - Middle East, Turkey and South Africa 2018 Outlook" report, it also stated that the corporate growth of Turkish companies would be "moderately lower" next year, as the accommodative fiscal policy will come to an end in 2017.

However, the international credit rating agency underlined that most of the Turkish corporates that have been rated possessed "healthy balance sheets, strong liquidity and market leadership positions," in addition to a "good track record of operating in a challenging environment."

"Export-oriented manufacturing companies in Turkey will see growth opportunities as demand in Europe increases, supported by a weaker lira," the Moody's report said, adding that especially those in the tourism, hospitality and aviation sectors would be backed by the improved security in Turkey.