Moody’s lowers Turkey’s rating, cites ‘erosion of institutional strength’

International rating agency Moody’s Investor Services lowered Turkey’s credit outlook from stable to negative.

The continuing erosion of Turkey’s institutional strength, its weaker growth outlook, heightened pressures on Turkey’s public and external accounts were reasons mentioned in a statement on Friday.

“The impact of ongoing political and geopolitical tensions on domestic confidence, and the heightened external pressures that led to a steep depreciation of the lira and high inflation, will suppress growth in the near-term relative to expectations last year,” Moody’s said in the statement that also highlighted an increased risk of a credit shock.

Fitch Ratings and Standard Poor’s had also downgraded Turkey from “stable” to “negative”earlier this year noting that political and security developments were likely to determine Turkey’s outlook.

In an interview with Kom News anthropologist David Graeber said that the “Turkish economy is held together by scotch tape,” financial expert and Associate Professor Mustafa Durmus, said that Turkey might even face a complete financial meltdown in 2017.