Probably it’s time, Turkish President Recep Tayyip Erdogan pays more attention to his own people and economy than thrashing out another expansive plan for a regional invasion. The country led by an over-ambitious leader, who has set his eyes on the region’s energy reservoirs, has been undergoing economic and political crisis for some years now. The ongoing pandemic-led lowdown further worsened its economic growth.
As per Moody’s investment ratings, Turkey tumbled down from its earlier mark owing to the nation’s dwindling economy, reducing fiscal buffers and political and institutional challenges. On Friday, the country’s credit rating also dropped from B1 to B2, coming down to the same level as Egypt, Jamaica, and Rwanda. The company predicted a negative outlook for the country in the near future. It said that its fiscal metrics could fall faster than currently expected.
Moody’s analysts Sarah Carlson and Yves Lemay in their financial assessment of the country said, “Turkey’s external vulnerabilities are increasingly likely to crystallize in a balance of payments crisis. As the risks to Turkey’s credit profile increase, the country’s institutions appear to be unwilling or unable to effectively address these challenges.”
The analyst added that Turkish gross foreign-exchange reserves (excluding gold) have also reduced over 40% this year, bringing it down to $44.9 billion as of Sept. 4. The country’s plummeting reserves have put additional pressure on sustaining its balance of payments. Besides, Moody hinted at Turkey’s rising geopolitical risks as a potential culprit behind its economic downfall, the onus of which falls on Erdogan’s policies. He is known to have splurged money on funding terrorist activities and training mercenaries in Syria, Libya, Somalia, and the nearby regions, whereas it own economy weakens amid a lack of effective monetary policy and fiscal stimulus.
S&P Global Ratings ranked Turkey’s long-term foreign currency rating at B+, whereas Fitch rated it at BB-.