ISTANBUL
International credit rating agency Moody's upgraded Tuesday Turkey's government bond ratings to BA1 from BA2, affirming the country's outlook at positive.
BA1 rating is one level below investment grade.
Moody's said the upgrade was mainly due to significant improvement in the country's public finances which would help increase shock-absorption capacity of the government's balance sheet, adding that Turkey's policy actions had the potential to address external imbalances such as the large current account deficit.
Moody's said the upgrade also reflected continued expectation for boosted fiscal and economic resilience in the future.
"Looking ahead, an upgrade to an investment-grade rating will probably be dependent on Turkey becoming more resilient to balance-of-payment shocks, given the already favourable public-finance metrics," Moody's said.
Moody's said Turkey's government spending-to-GDP ratio dropped from 40.1 percent in 2009 to 37.4 percent and that revenues were up to 34.2 percent to 36.1 percent.
