Moody's raises Turkey's rating

Moody's rating agency has raised Turkey's sovereign credit grade by one notch, citing significant improvements to its public finances and moves to ameliorate its current account deficit. The agency on Wednesday said it has upgraded Turkey's rating to BA1 from BA2 - just one notch below investment grade. It maintained its positive outlook for the country, citing an increased ability to withstand economic shocks. Turkey's economy grew by 8.5 percent last year and by 9 percent in 2010, but its current account deficit was seen as a high risk. Moody's Investors Services said efforts to lower Turkey's debt burden were unlikely to be affected by the "challenging" economic environment or a slowdown in Turkey's growth rate. However, the Economy Minister Zafer Caglayan said this was not enough and assured that the Turkish economy was sounder than many economies rated as "investable." "In an environment where the foreign markets are under fire, Turkey’s public debt keeps on decreasing. Turkey’s public debt ratio to gross domestic product is smaller than 21 out of 27 European Union nations, as its budget gap ratio to the GDP is smaller than 23 countries in the nation. The rating grade of such a country should be higher than BA1," he said in his written statement. The minister noted that Turkey’s rating was at the same level as Hungary, Ireland and Guatemala and said "Another [rating] company keeps Turkey’s grade at the same level with Guatemala and Portugal, who has received bailout support and whose economy is shaken. Turkey is a country which has already announced that it will give $5 billion to IMF for helping crisis-hit countries."