Fitch Says Turkey Would ‘Tarnish’ Credibility With Rule Delay

Turkey would “somewhat tarnish its fiscal credibility” by delaying a decision to introduce new limits on budget spending and failing to implement the steps, Fitch Ratings Ltd. said.

The delay and weakening of the so-called fiscal rule by the government suggests it may run a larger budget deficit next year than planned, Fitch analyst Edward Parker said in an e-mailed response to questions today.

Fitch hasn’t made a linkage between legislating the rule and potential ratings actions, Parker said.

“Fiscal outcomes are more important than fiscal rules,” he said. “The path of the budget deficit and goverment debt-to-GDP ratio are likely to be important drivers of future rating actions. The passing or non-passing of rules alone will not.”

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