International credit ratings agency Moody's has announced that it has downgraded Turkey's outlook from stable to negative, while affirming Turkey's Baa3 rating at its current level.
Moody's said that the decision to change the outlook to negative was prompted by increased pressure on the country's external financing position driven by heightened political uncertainty and lower global liquidity, adversely affecting foreign and domestic investor confidence, as well as a slowing near-term outlook for GDP growth.
On the other hand, the ratings agency affirmed Turkey's Baa3 rating due to the government's strong fiscal metrics and Turkey's economic strengths, specifically its size, wealth and economic diversification, which remain strong relative to other countries in the same rating category.
