Referendum results from credit rating agencies’ perspective

Dunya Executive - - OVERVIEW -


The referendum result of “yes” by a narrow margin increases uncertainty and puts pressure on credibility

The government will be busy with both domestic politics and geopolitical risks

A tense political atmosphere due to the ongoing state of emergency may have a negative impact on business and consumer confidence

Low investment and consumption levels will keep growth below historical standards

Restoration of trust is critical to reviving economic growth

Net exports will continue to place a strain on economic growth due to difficulties in production and competition.


The constitutional referendum is part of the political change that is negative in terms of the credit-rating profile of the country. However, it can bring economic reforms that could be positive for the credit rating

We assumed that the constitutional package would be approved when we dropped Turkey’s note

The new presidential and parliamentary elections are not mandatory until the end of 2019. So this can ensure that economy is again among the priorities of the AK Party

It will be an important part of our assessment how much emphasis will be placed on different options in economic policies and how successful they will be in achieving sustainable growth

A possible weakening in public and external financing, which will be reflected in a deterioration in the debt-to-GDP ratio, and fragilities in external financing are the critical factors for credit rating

Implementation of the reforms that will reduce structural deficiencies and reduce external fragility will be positively reflected in credit ratings.


The direct impact of the constitutional referendum on the credit rating will be limited

The policies that the government will carry out in order to face the challenges of the economy will be followed

Increasing presidential power and a quick decision-making system will contribute to mitigating political risk. However, social instability may last for a while.

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