Turkey’s military offensive in Syria poses economic risks: S&P

Turkey’s military offensive in Syria could put weaken its tourism sector, which performed well in 2018 and 2019, S&P says. (File photo: Reuters)

Turkey’s deployment of military troops into Syria raises risks for the Turkish lira and the country’s balance of payments, ratings agency S&P Global Ratings said in a statement on Wednesday.

“Potential consequences of military operations in northeastern Syria could include, like in the past, retaliatory attacks in the region, including on Turkey's tourism infrastructure,” S&P added in the announcement, shortly after Turkey launched an offensive against Kurdish-led fighters in Northeastern Syria.

The ratings agency, however, said it does not expect the economic risks from the operation to have any immediate impact on its sovereign ratings on Turkey.

Although Turkey saw strong tourism performance in 2018 and 2019, Ankara’s latest move could impact perceptions of security which could put a damper on this key sector, S&P said.

“The potential for conflict in northeast Syria and a possible resurgence of terrorism within Turkey itself may hamper such perceptions and could impede Turkey's comprehensive recovery in foreign currency earnings to the detriment of its employment and foreign reserve levels and exchange-rate stability,” S&P added.

S&P currently has an unsolicited rating on Turkey of a “B+” with a stable outlook.

Last Update: Wednesday, 9 October 2019 KSA 19:18 - GMT 16:18

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