International credit rating agency Moody's said Friday that the current economic recession affected Turkey's economy worse than the financial crisis of 2001 in this country.
Moody's said however that the public financing in Turkey whose economy is dependent on foreign capital was doing relatively better in the global financial crisis.
It said doubts over the sustainability of the unprecedentedly low levels of interest rates in Turkey would have a major effect on the future credit rating of the Turkish government.
Moody's pointed out that the stable outlook of the Turkish government depended heavily on Turkish government's ability to manage the effects of the global financial crisis and deal with the continuing deep deterioration in the credit indicators.
It argued that the the expected deterioration in the budget deficit and debt dynamics suited Turkey's current rating of "Ba3", warning that if the economic and political stability messed up the debt indicators of the government, Turkey's credit rating could face a downward revision.
It said the current recession could be explained by the reversal of the capital flow noting that the capital inflow of USD 27 billion H1 in 2008, declined to USD 5.5 billion in the same period on 2009.
Moody's which revised its projection of contraction for Turkey to 5.5, expects a growth rate of 2.5 for 2010.