S&P Global Ratings has upgraded Turkey's credit rating outlook, citing the government's strategy of taking a more rebalanced approach that is expected to generate confidence in its economy.
The country's long-term rating was raised one notch up to “B+” from “B”, with a positive outlook, the New York-based ratings agency said on Friday.
A “B+” rating, which is “highly speculative”, is four levels below investment grade, according to S&P's ratings scale. Non-investment grade makes it more difficult for a country to access capital markets and raise funding that it needs when it wants to borrow.
S&P expects Ankara will take measures to streamline fiscal, monetary and incomes policies, which would include cuts to current non-wage expenditures in 2024.
Also, in the aftermath of the devastating earthquake that hit Turkey and neighbouring Syria, any spending related to the natural disaster may take longer to execute, it said.
“Details of a larger, more-detailed fiscal and incomes policy plan are limited. We believe the emphasis will be on gradual changes, rather than a front-loaded economic programme,” S&P said.
“Nevertheless, we think that the economy is already rebalancing, with net exports already adding to rather than subtracting from growth and that credit conditions are tight. We also believe a stable nominal exchange rate will promote the de-dollarisation of private and public balance sheets.”
S&P's decision follows local elections in Turkey, in which President Recep Tayyip Erdogan's party suffered a surprise and heavy defeat.
A return to a more orthodox policy has led S&P to “believe the co-ordination between monetary, fiscal, and incomes policy is set to improve, amid external rebalancing”.
“We forecast rising portfolio inflows and narrowing current account deficits over the next two years, alongside declining inflation and dollarisation, although progress will be slow and reserve accumulation modest as the central bank limits depreciation of the Turkish lira,” S&P said.
In an alternative scenario of a harder economic landing, “fiscal outcomes would be worse and balance-of-payments trends would be better”, it added.
Turkey is facing chronic inflation following years of Mr Erdogan's unorthodox policies. He installed a new economic team to stabilise the economy and control consumer prices last year.
The country's central bank said in December that it expects inflation to rise to as high as 75 per cent in May, before dipping to about 36 per cent by the end of this year.
The Turkish lira is also among the worst performers among emerging market currencies tracked by Bloomberg. It is down nearly 9.5 per cent so far in 2024.
On March 21, Turkey’s central bank delivered a surprise interest rate rise, increasing its benchmark rate to 50 per cent from 45 per cent, tightening the monetary policy further as the regulator fights to curb inflation that rose to 70 per cent in last year.
S&P expects the Turkey's central bank to keep its benchmark rate at 50 per cent for the rest of 2024 and be vigilant against depreciation pressures on lira as a means of tempering demand and minimising the effects of the exchange rate into inflation.
Political stability would also be a factor; with no scheduled national elections until 2028, the country's policymakers “have space to implement policies to compress demand and inflation, using all available wage-setting, fiscal and monetary tools”, it said.
“Whether and how quickly authorities tackle the inflation problem will affect economic stability, public finances and hence our sovereign rating on Turkey. Public-sector wages and pensions remain indexed to past inflation, which will make it much tougher to tame inflation quickly.”
Turkey has also stopped all trade with Israel until the latter allows humanitarian aid to flow uninterrupted into Gaza.
The decision expands on a move announced in April to restrict some Turkish exports to Israel due to the “worsening humanitarian tragedy in Palestine”, Turkey's Trade Ministry said on Thursday.
UAE squad to face Ireland
Ahmed Raza (captain), Chirag Suri (vice-captain), Rohan Mustafa, Mohammed Usman, Mohammed Boota, Zahoor Khan, Junaid Siddique, Waheed Ahmad, Zawar Farid, CP Rizwaan, Aryan Lakra, Karthik Meiyappan, Alishan Sharafu, Basil Hameed, Kashif Daud, Adithya Shetty, Vriitya Aravind
The Case For Trump
By Victor Davis Hanson
How the bonus system works
The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.
The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.
There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).
All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
MATCH INFO
Chelsea 1 (Hudson-Odoi 90 1')
Manchester City 3 (Gundogan 18', Foden 21', De Bruyne 34')
Man of the match: Ilkay Gundogan (Man City)
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Ibrahim's play list
Completed an electrical diploma at the Adnoc Technical Institute
Works as a public relations officer with Adnoc
Apart from the piano, he plays the accordion, oud and guitar
His favourite composer is Johann Sebastian Bach
Also enjoys listening to Mozart
Likes all genres of music including Arabic music and jazz
Enjoys rock groups Scorpions and Metallica
Other musicians he likes are Syrian-American pianist Malek Jandali and Lebanese oud player Rabih Abou Khalil
Aayan%E2%80%99s%20records
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Turkish Ladies
Various artists, Sony Music Turkey
Who has lived at The Bishops Avenue?
- George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
- Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
- Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
- Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
- Land was originally the Bishop of London's hunting park, hence the name
- The road was laid out in the mid 19th Century, meandering through woodland and farmland
- Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
