Credit agency Fitch upgrades Turkey’s rating

At the same time, the agency affirmed Turkey’s short-term rating at B.
In a statement issued by the agency, Fitch that the upgrade reflected progress towards sustaining macroeconomic stabilisation, most notably the decline in inflation and interest rates as well as exchange rate stability. This was underpinned by on-going fiscal consolidation and economic reform under the International Monetary Fund (IMF) program, it said.
“Along with strong bilateral and multilateral financial support, and the government’s commitment to further economic and political reform necessary to secure agreement from the European Union to begin the accession process, the reform credentials of the government have been strengthened and ameliorated short-term fiscal and external financing concerns,” the statement read. “The fiscal financing outlook for 2004 is relatively benign and it would take a series of major shocks for the government to encounter difficulties in meeting its debt servicing obligations this year.”
However, Fitch warned that concerns over the sustainability of public finances remained, including the reliance on ‘one-off’ measures to meet the 6.5 percent of Gross National Product (GNP) primary surplus target in 2003 and the slow progress of privatisation.