Fitch: investment grade for Turkey unlikely before elections

LONDON, March 9 (Reuters) - Turkey is unlikely to get an investment grade rating in the near term due to concerns arising from the faultline between its secularist military and Islamic-leaning government, a Fitch analyst said on Tuesday.

Fitch was the first of the three main ratings agencies to up Turkey's sovereign ratings, lifting the credit rating to BB+ from BB- in December on what it said was the country's fiscal resilience.

"Even if things were to go reasonably well it is unlikely we would get to investment grade this side of elections until we are relatively confident that constitutional reform that will be needed can pass through without serious political unrest," senior director Edward Parker said at a conference on sovereign risk.

Prime Minister Tayyip Erdogan's Islamist-rooted government is aiming for a third term in elections due 2011.

Tensions between the armed forces and the ruling AK Party have resurfaced in the last month after several military officers were detained for an alleged conspiracy to overthrow the government.

The government is also planning to reform the constitution to curb the power of the judiciary and make it harder for it to ban political parties -- a move opposed by secularist critics.

"This faultline is going to be with us for the forseeable future and it's going to generate a lot of noise and something that an assessment of Turkish risk has to take in," Parker added.

"We don't expect things to get serious as they seemed to be in 2007 and 2008 but we can't completely rule out any extreme events." (Reporting by Sebastian Tong; editing by Carolyn Cohn)