The international credit rating agency, Moody’s, has downgraded its outlook on Turkey over increased pressure on the country’s external financing position and weaker growth prospects.
Moody’s on Friday changed the outlook from stable to negative, which puts the government’s investment-grade rating at risk.
The agency said the ongoing political standoff in Turkey is affecting investor confidence and casting doubt over further reforms.
It also reaffirmed Turkey’s current bond rating to Baa3, which is just above the so-called junk status.
The downgrade mounts more pressure on the government of Prime Minister Recep Tayyip Erdogan, who was praised a few years back for Turkey’s economic development through his 11-year rule.
Turkey’s economy grew by 4.0 percent last year but is expected to suffer a slowdown after months of political unrest and ahead of the country’s presidential polls in August.
The Erdogan administration has been faced with mass protests, corruption scandals and international pressure for blocking users’ access to Twitter and YouTube, among other Internet bans.
According to Moody’s, political tensions in Turkey will persist, despite the victory of Erdogan’s party in the March 30 local elections.
The agency also speculated that Turkey’s economic growth will slide to 2.5 percent in 2014.
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