TOKYO/ANKARA (A.A) - 12.07.2002 - The Japan Credit Rating (JCR) said on Friday that the political turmoil in the coalition government concerning the speculated resignation of Prime Minister Ecevit will destabilize Turkey's politics, leading to an increase in the public debt burden through a depreciation of the Turkish lira (TL) and persistently high interest rates, and consequently will make it more difficult to carry out the economic program agreed with the IMF.
Releasing a statement, JCR affirmed B+ rating on Japanese yen denominated long term bonds issued by Turkey to Japanese markets while it downgraded economic outlook on Turkey from stable to negative.
Meanwhile, JCR affirmed the ratings in view of the progress in implementing the economic reform program so far made and the importance of Turkey's geopolitical position. On the other hand, they are constrained by the heavy public debt burden, weak external debt position and political difficulties in carrying out the structural reforms.
The political situation of Turkey further has worsened and the solidarity of the coalition government has loosened with the heightening pressure on the resignation of Prime Minister Bulent Ecevit so the political outlook has become extremely uncertain with the possibility of an early general elections, it said.
JCR added that it will keep close watch on developments in Turkey.