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LONDON, March 7 (Reuters) - Turkey would need a “durable” reduction in its structural deficit, lower inflation and more foreign direct investment to secure another ratings upgrade, Fitch said on Thursday, forecasting little immediate fall in the current account gap.
Speaking at a Fitch briefing on Turkey in London, Fitch’s sovereigns senior director Paul Rawkins said Turkey’s key weakness was a low savings rate while its dependence on foreign portfolio inflows was also a vulnerability.
“We don’t see the current account deficit improving much from here, at least not in the next couple of years, it will be a long term process,” Rawkins said.
“The way the current account deficit evolves and its funding trend will be important for this credit rating. It’s important to see more long term flows,” he said.
Fitch upgraded Turkey to investment grade in November, highlighting its moderate and declining levels of public debt.
Reporting by Sujata Rao; Writing by Daren Butler; Editing by Nick Tattersall