The Standard & Poor’s (S&P) rating agency affirmed Turkey’s sovereign credit ratings Friday and kept its outlook “stable.”  

Turkey’s long-term foreign currency sovereign credit rating was held unchanged at “B+” while local currency sovereign credit rating was preserved at “BB-“.

The agency expects the Turkish economy to contract 3.3% in 2020 because of the coronavirus, before recovering 4.5% in 2021.

“Although we expect economic growth to recover in the second half of the year, there are signs of past imbalances re-emerging, including the rapid pace of credit growth, double-digit inflation, and a widening of the current account deficit in recent months,” it said.

The S&P kept medium-term growth projections unchanged, with the growth at 3.5% on average in 2022 and 2023.

It forecast net general government debt will remain modest, 35% of GDP, at the end of 2020 even after factoring in negative budgetary effects of the pandemic.

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