Kristin Lindow, an analyst with Moody's, said that the delay in the IMF-required structural reforms might become an obstacle before the economic developments in the short and medium run. However, Lindow added, they expected the said reforms to be legislated shortly.
Another warning made by the Moody's analyst was about the current account deficit. Lindow commented that the current account deficit causes concern because of the overvalued TRY and debt-creating financing of the deficit. If export revenues would be lower than expected due to poor performance of the textile sector, current account deficit could be higher than the one registered in 2004 despite high tourism revenues and the deceleration in imports, she furthered.
Turkey's current account deficit widened to USD 15.6bn in 2004 with a 94% y/y increase. Lindow also
said that if concerns over some political and economic issues, addressed by the rating agency in
February, persist, Moody's may not review Turkey's ratings, even the rating outlook could be
downgraded. In February, Moody's revised the outlook on Turkey's all ratings to positive from stable.