Fitch cuts Turkey's Credit Rating deeper into Junk Territory

[TOYGAN]

By the end 2021, it was expected to touch 47% by Fitch Ratings.

Still Turkey has the lowest debt to compare with GDP in Europe

Turkey 47%
Italy 141%
Denmark 158%
Germany 165%
Austria 165%
Sweden 169%
Spain 170%
Norway 181
Portugal 203%
France 230%
Belgium 269%
Greece 298%
UK 345%


Turkish private sector's external debt amounts $169 billion as of 2022 and $161 billion of $169 is long-term foreign loan

European Banks are major investors in Turkey since 2009 which have invested more than $220 billion in Turkey through thousands of projects, 90+% of which is in the private sector.

Turkish private sector can pay its debt to the European Banks



In 2021 compared to 2020

Exports increased by 32.85% to $225 billion 368 million
Imports increased by 23.61% to $271 billion 355 million
Turkey's trade deficit fell 7.8% year-on-year to $45.9 billion in 2021

Turkish trade deficit narrows 7.8% in 2021 - Erdogan

Turkey's trade deficit fell 7.8% year-on-year to $45.9 billion last year, President Tayyip Erdogan said on Monday, narrowed by a 32.9% surge in exports.

www.reuters.com

 

[Indos]

Still Turkey has the lowest debt to compare with GDP in Europe

Turkey 47%
Italy 141%
Denmark 158%
Germany 165%
Austria 165%
Sweden 169%
Spain 170%
Norway 181
Portugal 203%
France 230%
Belgium 269%
Greece 298%
UK 345%


Turkish private sector's external debt amounts $169 billion as of 2022 and $161 billion of $169 is long-term foreign loan

European Banks are major investors in Turkey since 2009 which have invested more than $220 billion in Turkey through thousands of projects, 90+% of which is in the private sector.

Turkish private sector can pay its debt to the European Banks

How do you know they can pay the debt if the customers of the business who get the loan from foreign bank are domestic and use Lira ?

 

[TOYGAN]

How do you know they can pay the debt if the customers are domestic and use Lira ?

not Lira but USD based price

and Turkish private sector built mega projects with State guarantee
Mega projects added billions of dollars to Turkish Economy


only one example , Eurosia Tunnel which cost $1.25 billion, is due to be operated by private sector ATAŞ for 21 more years. The project was carried out under a build-operate-transfer (BOT).and Eurasia Tunnel added $600 million to Turkish Economy

Around 79 million vehicles passed through the Eurasia Tunnel while the state guarantee had foreseen that 25.6 million vehicles would use the tunnel per year.

 

[Indos]

not Lira but USD based price

and Turkish private sector built mega projects with State guarantee
Mega projects added billions of dollars to Turkish Economy

So even domestic transaction uses USD instead of Lira ???

 

[TOYGAN]

So even domestic transaction uses USD instead of Lira ???

uses Lira but USD based price , if USD rises then price also rises
because European Banks financed Turkish private sector to build mega projects in Turkey
therefore Turkish private sector's external debt amounts $169 billion as of 2022

 

[Indos]

uses Lira but USD based price , if USD rises then price also rises
because European Banks financed Turkish private sector to build mega projects in Turkey
therefore Turkish private sector's external debt amounts $169 billion as of 2022

It can happen for government project, but I doubt this will happen to non government projects like between private sectors (B2B) or private sector to public customers (B2C)

 

[TOYGAN]

It can happen for government project, but I doubt this will happen to non government projects like between private sectors (B2B) or private sector to public customers (B2C)

Almost all of the guarantee costs of the projects made with the build-operate-transfer method under the name of public-private partnership (PPP) are indexed to USD

 

[[TR]AHMET]

FETO and AKP is partner before, better forgive

Just punish the wrongdoing person, Erdo is just getting mad, kicking out of all FETO members despite the coup I believe is only planned by 10 FETO persons ( their leaders)

Be Just as Muslim, this is the main character of real Believers

it is not like that, FETO, KEMALISTS and MASONS were captured our state in 80s and 90s but Erdogan infiltrate in FETO and destroy it. Also destroy PKK and now he focus on masons.

Before Military coup our intelligent sevice stopped them several times but finally they done military coup at 15 july in 2016 and Turkish people overcome with help of Allah. Erdogan was must be know who is the real FETO members before he destroy this treason network. so abdullah gul and ahmet davutoglu fired by Erdogan before military coup. Now Abdullah gul and ahmet davutoglu working against Erdogan with opposition parties like CHP (western backed), HDP (PKK terrorists backed)

So Erdogan still in same place from his starting position, nothing changed he still try to defend our state and people from our enemies.

 

[Indos]

Hi Indos we the Turks always have respected your informed and balanced views on all kind of issues about Indonesia and others however right now you’re making a mistake these are very sensitive matters and you make very bolt accusations i feel saddenend by this.

I only want civil power in Turkey to cooperate and leave grudge for the shake of Turkey long term development.

Divided civil power like happening in Thailand and Eqypt will give opportunity for the military to rule again under authoritarian rule and abolish democracy.

 

[vi-va]

The way I see it, Turkish gov is trying to force a change in its economic structure with this devaluation of the currency. They were trying to jump start exports and was aiming for a net trade surplus. However things have gotten somewhat out of hand. Erdogan has some balls tho, he's staying course to see this though even with %80 devaluation of the lira.

Erdogan lost the chance already. Turkey need stable political environment domestically and internationally, or Turkey has strong allies backing. Turkey has none of them right now.

It will take at least 10+ years to do the transition you mentioned above, time is not on Turkey's side.

China/East Asia model is so far the only working model for developing countries.

 

[vi-va]

Huge saving is not actually something good, it means the population is cautious on the future, better more spending to stimulate domestic economy, Indonesia domestic spending is around 60% of GDP.

China businesses use the saving to finance their business plan, one of them is on property sector which is seeing some problem at the moment and I believe China banking NPL (Non performing Loan) will increase due to that problem.

Indonesia will not develop well without rich resource. Indonesia currently still relies heavily on resource.

China doesn't have rich resource due to huge population, saving is the only way to develop for us. So is South Korea.

 

[Tshering22]

Yep, who gives a Fitch about Fitch?

There have to be a different set of economic and financial parameters to assess developing countries as the economic structures are very different in these countries. Using the same model that is applicable to rich economies will always make emerging countries look inadequate.

New Development Bank (BRICS) was in discussion to set up an independent agency but sadly it got pushed aside over time.

Erdogan lost the chance already. Turkey need stable political environment domestically and internationally, or Turkey has strong allies backing. Turkey has none of them right now.

It will take at least 10+ years to do the transition you mentioned above, time is not on Turkey's side.

China/East Asia model is so far the only working model for developing countries.

Turkey was pretty much on track using the European industrialization model. In fact, their emergence from the ruins of the Ottoman Empire was attributed to the focus on industrialization, infrastructure, economic opening, skilled building, and military modernization.

They just kind of deviated in the last 10 years. Though there were sporadic intervals of development seen, RTE kind of ruined it by getting involved in a big power play before fully becoming autonomous. He needs to stop playing Ottoman and focus on creating an independent narrative that is balanced between all regions of the world. Along the lines of what Bülent Ecevit did.

 

[vi-va]

There have to be a different set of economic and financial parameters to assess developing countries as the economic structures are very different in these countries. Using the same model that is applicable to rich economies will always make emerging countries look inadequate.

New Development Bank (BRICS) was in discussion to set up an independent agency but sadly it got pushed aside over time.



Turkey was pretty much on track using the European industrialization model. In fact, their emergence from the ruins of the Ottoman Empire was attributed to the focus on industrialization, infrastructure, economic opening, skilled building, and military modernization.

They just kind of deviated in the last 10 years. Though there were sporadic intervals of development seen, RTE kind of ruined it by getting involved in a big power play before fully becoming autonomous. He needs to stop playing Ottoman and focus on creating an independent narrative that is balanced between all regions of the world. Along the lines of what Bülent Ecevit did.

I totally agree with your observation.

I think the problem is offshore power - France, UK, and US won't tolerate independent Turkey.

Turkey is not as useful as it was during Cold War, the frontline country against Soviet, but a current threat to EU/US interest in ME.

Turkey was/is developing their own industry, as well as weaponeries, that will not be tolerated.

Last but not least, Turkey is Islamized again, combined with aggressive foreign policy, can't be tolerated by the combined West.

 

[Tshering22]

Well, Turkey chose conservatism because the EU had kept them hanging when they were Liberal. Their society is still pretty modern and very reasonable there, unlike politics. Turkey was played for quite some time despite their sincere support. We as non-NATO members often discuss how come they let it slide year after year.

Unfortunately, Erdogan started lashing out against everyone and lost the plot, messing with his country in the process. There were several countries where they could have used their resurgence to gain allies.

Let's hope he continues the course correction and realizes that everyone is not his enemy.