Turkey’s credit rating upgraded to “B+” by Standard & Poor’s: Positive Outlook for Economy Ahead

Standard & Poor’s announced that it raised Turkey’s credit rating from “B” to “B+,” and the credit rating agency said, in a statement, that it maintained Turkey’s future outlook at “positive “. The statement expected, on Friday, an increase in investment portfolio flows in Türkiye, a reduction in the current account deficit, andLow inflation And dollarization in the next two years, confirming, according to Anadolu Group, that it is possible to increase Turkey’s credit rating if the inflation is reduced and confidence in the lira is restored.

He said that Turkey’s economy is expected to grow by 3% in the current and next years. Official data showed on Friday that annual consumer price inflation in Turkey rose to 69.8% in April, registering a rate slightly lower than expected but the highest rate since the end of 2022 due to a sharp increase in the prices of education, restaurants and hotels.

According to the Turkish Statistical Institute, consumer price inflation reached 3.18% in April on a monthly basis compared to 3.16% in March. In January and February, inflation rose 6.7% and 4.53% respectively per month, largely due to a strong increase in the minimum wage and a set of price updates in the new year.

The minimum wage was increased by 50% on 1 January. Turkish Labor Minister Vedat Isikhan confirmed in mid-April that the minimum wage would not be raised next July, unlike the previous two years, to combat inflationary pressures.

The central bank has raised interest rates by 3,650 basis points since June, including a 500 basis point increase in March due to lower inflation expectations. But he kept interest rates unchanged last month at 50%, suggesting the effects of monetary tightening had been delayed, and promised further tightening of monetary policy if inflation were to fall sharply. . The central bank expects inflation to peak at around 73% to 75% in May, and then start to decline in the second half of the year, reaching 36% at the end of 2024.

Turkey’s Finance and Finance Minister Mehmet Şimşek confirmed on Friday, “Thanks to our program, achieving a balance in the economy, a reduction in the current account deficit, a readjustment of the budget, a strong increase in international resource flows and a A shift in domestic portfolio options towards the Turkish lira is supporting the fight against inflation,” he said. “After the annual inflation rates in May, it will start to decline significantly according to our expectations. “

(Anatolia, Reuters, Al-Araby Al-Jadeed)