S&P Global Senior Director Frank Gill spoke to Bloomberg about the Turkish economy, for which S&P changed its credit rating from B to B+. Stating that they will look at Turkiye’s net reserves for another rating increase, Gill stated that they “do not ignore” the hard landing scenario.
Standard and Poor’s (S&P) Global Senior Director Frank Gill evaluated Turkiye’s credit rating, which returned from B to B+ after 11 years.
Stating that they see dollarization in households in Turkiye, Gill said that they expect the ratio of the current account deficit to national income to be below 2%. Gill stated that dollarization and growth expectations in Turkiye will be a reference in decision-making processes.
“We foresee the level of 34-35 in Dollar/TL at the end of the year.” Gill said the following about the Turkish economy to Bloomberg HT, where he was a guest:
“According to our growth targets and statistically excluding the base effect in 2024, we expect growth to be around 1.1-1.3%. While the economy is so dollarized under current conditions, the exchange rate will be one of the most important anchors at the moment. We foresee the USD/TL level at 34-35 at the end of the year.”
“Our base scenario is that there will be no second increase in the minimum wage this year.”
Noting that the minimum wage increase last year reduced the margins, Gill said that the government may try to keep the TL stable this year. “Our base scenario is that there will be no second increase in the minimum wage this year,” said Gill, adding that this will bring about a critical period for inflation and will be a development that could shape the exchange rate expectations of 2025.
Evaluating Turkiye’s possible rating increase in the next period, Gill said, “We will look at Turkiye’s net reserves for another rating increase. We do not rule out a hard landing in the Turkish economy.”
Source: Dunya.com / Prepared by Irem Yildiz