Moody’s Lowers Turkey’s Growth Forecast

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International credit rating agency Moody's has lowered the growth forecast of Turkey in 2018 from 4 percent to 2.5 percent.

As reported by BBC Türkçe, the Moody's has referred to three main reasons for its decision to lower Turkey's growth forecast in 2018, namely, the high rates of inflation, the increasing oil prices and the loss of value in the Turkish Lira (TRY).

While the annual inflation goal of the Central Bank of the Republic of Turkey (TCMB) was previously announced as 5 percent, the inflation rate is currently at the level of 10.85 percent.

Moody's has pointed out that the currency impact which will occur due to the loss of value in the Turkish Lira is likely to further increase the inflation rates in the upcoming months.

The rating agency has also emphasized that as a result of the statements made by the President and Justice and Development Party (AKP) Chair Recep Tayyip Erdoğan regarding monetary policies, the independence of the Central Bank has become questionable.

In March 2018, Moody's lowered Turkey's credit rating from Ba1 to Ba2 and changed its outlook from "negative" to "stable". (EKN/SD)