ANKARA: U.S.-based credit rating agency Moody’s has said that Turkish banks are maintaining their well-capitalized situation and that the recovery of bilateral relations with countries in the region could have a positive effect on the tourism sector in the upcoming period. Speaking to Anadolu Agency (AA), Moody’s officials noted that the Turkish economy is expected to grow by 2.3 percent in 2017 and that the growth rate is predicted to rise to 3 percent in 2018. According to Moody’s, the inflation rate in Turkey is expected to stand at 8.2 percent at the end of the year and at 8 percent at the end of the next year. Also, the ratio of the current account deficit to the Gross Domestic Product (GDP) might reach 5.2 percent at the end of this year and 5.3 percent at the end of 2017.
The credit rating agency’s statement revealed, “Turkish banks maintain their well-capitalized situation. However, the loss of value in the Turkish lira and the economic slowdown have raised new concerns about the banking system.” It was emphasized that these factors may negatively affect the quality of assets, financing costs, profitability and growth potential of the banks. It was also noted that Turkey’s recently improved bilateral relations with countries in the region; especially Russia, Israel and Iraq, could have a positive effect on the tourism sector in the coming period. According to the statement, it is too early to predict how improving relations with a few countries could affect the Turkish economy. Moody’s added, “However, this can positively affect the tourism industry, which has faced challenges posed by a declining number of tourists over the past few years.”
