World Economy

Turkey Downgraded to Junk

Turkey Downgraded to JunkTurkey Downgraded to Junk

Ratings agency Moody’s has cut Turkey’s key bond ratings to what is effectively junk status, citing risks including slowing economic growth, reported. S&P Global Ratings downgraded Turkey in July, following a failed coup attempt in the country, and now only Fitch remains as a major agency keeping Turkey above junk. Losing its investment grade will make it more expensive for Turkey to raise capital on global markets. “Moody’s expects growth will slow over the coming years, as constraints on the externally-funded, consumption-fuelled economy emerge, the reform agenda slows further and the investment climate remains weak,” the agency said in a statement. “The risk of a sudden, disruptive reversal in foreign capital flows, a more rapid fall in reserves and, in a worst-case scenario, a balance of payments crisis has increased,” Moody’s said, also citing concerns over “institutional strength”.