Turkish labor minister lashes out Fitch rating downgrade

Fitch rating downgrade move was described as ‘political’ by Turkish Labor Minister Mehmet Muezzinoglu.

Turkish Labor and Social Security Minister Mehmet Muezzinoglu criticized ratings agency Fitch on Tuesday after it downgraded Turkey’s rating on Friday.

Speaking at Anadolu Agency’s Editor’s Desk, Muezzinoglu said the Fitch move was not an “economic” but a “political” one.

“Today, the Turkish economy multiplies Greece by 100 with its dynamics, export and production. But it [Greece] will never suffer rating downgrades, but upgrades.

“Why? Because the [Fitch] move is not economic, but political,” Muezzinoglu said.

On Jan. 28, Fitch lowered Turkey’s credit rating to “BB+”, from “BBB-” with a stable outlook.

“Political and security developments have undermined economic performance and institutional independence,” Fitch said in a statement. “High-profile terrorist attacks have continued, damaging consumer confidence and the tourism sector,” it claimed.

Although the political environment “may stabilize,” security challenges remain, Fitch added.

Turkish Prime Minister downgrades downplays rating cuts for Turkey’s economy

Positive or negative decisions by ratings agencies regarding the economy should not be taken too seriously, Turkish Deputy Prime Minister Numan Kurtulmuş has said, calling for a smooth process following downgrades both by Fitch and Standard & Poor’s on the Turkish economy.

Fitch downgraded Turkey’s sovereign debt to “junk” late on Jan. 27, snuffing out its last remaining investment grade and underscoring deepening concern about politics and monetary policy in what was once a star emerging market. The ratings cut, although widely expected by the markets, came hours after rival agency S&P surprised investors by lowering its outlook for Turkey from “stable” to “negative,” citing concerns over the plunging Turkish Lira and the rising inflation rate.

During a televised interview on Jan. 29, Kurtulmuş said the process should occur in a smooth way.

“Any upgrade in our ratings does not mean ‘everything is great in the Turkish economy.’ This is also the case for the downgrades, as the rating or outlook cuts should not be seen as ‘we are dead or something like that,’” he told CNN Türk.

Kurtulmuş said there was no great problem with the country’s macroeconomic indicators.

“The point is to boost our production capacity… In a bid to reach this target, we have been taking some key measures, including a new incentive program to create attraction centers, which was recently announced by Prime Minister Binali Yıldırım,” he said, adding that what the government should do was run the economy so as not to shake the macroeconomic balances and the financial system.

According to Kurtulmuş, rating agencies sometimes move according to political motives rather than economic ones.

“I believe that the recent decisions by such agencies are part of a smear campaign against Turkey that is aimed at driving it into a corner,” he added.