Turkey’s economy most vulnerable in G20 to COVID-19, Moody’s says

Credit rating agency Moody’s has updated its forecast for Turkey’s financial year to take the coronavirus pandemic into account, revising its estimated 3 percent economic growth to a 1.4 percent contraction over the coming year.

Moody’s said Turkey was especially vulnerable to what it called an unprecedented shock to the global economy caused by the coronavirus, as the credit rating agency revised its global forecasts for 2020.

“We expect Turkey’s economy to be hit hardest” by the pandemic among G20 economies, Moody’s said in a report on the global macro outlook, “with a cumulative contraction in second- and third quarter GDP of about 7 percent.”

The agency’s forecast flew in the face of optimistic statements by Turkish Treasury and Finance Minister Berat Albayrak, who had said he was confident that Turkey would achieve its aim of 5 percent growth this year despite the damage caused by the virus.

The minister said Turkey was in a position to overcome the impact of the COVID-19 pandemic, accrediting its low indebtedness, large and skilled workforce and strong production infrastructure. The government has unveiled a 100-billion lira ($15 billion) support package to provide relief to beleaguered businesses.

But Moody’s placed Turkey as one of the least able to overcome the shock caused by the pandemic, and estimated that its economy would only grow by 0.8 percent in 2021 after contracting this year. It said the country’s tourism sector would be hit particularly hard over the summer.