Year-end growth estimations for Turkey have been upgraded to 2.7 percent, Fitch Ratings Senior Director Janine Row said on Tuesday, pointing to the country's robust banking system and strong first-quarter growth performance. Speaking to Anadolu Agency, Row said that many international institutes – including the World Bank, Standard & Poor's and the OECD – have upgraded their growth estimations for Turkey.
"Fitch expectations were revised up as well, but very modestly from 2.4 percent to 2.7 percent. Other agencies and other international financial institutions have increased the forecasts for growth for Turkey. And we saw that Q1 growth was very strong [at] 4.3 percent," Row said. Row said that Turkey has a strong banking system, which can cope up with financial shocks. "Capital positions of the banks are generally quite good. That provides some buffers… to withstand against any shocks," Row said. Claiming that geopolitical strains in Turkey's region will continue to pose problems, Row said that an increase in savings and foreign direct investments could cushion volatility in economy.
"We have repeatedly stated that Turkey is likely to be considerably more volatile than other BBB range countries and there is no timeline," Row said. After this month's presidential election saw a victory for Recep Tayyip Erdogan, Fitch released a statement saying: "Turkey has been remarkably resilient to recent external shocks and banks and corporates continue to enjoy high roll-over rates, but we expect political risk to remain a credit weakness that could lead to a negative rating action if it adversely affects government effectiveness and policy predictability."
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