Ankara, Turkey – Fitch Ratings has affirmed Turkey’s long-term sovereign credit rating at BB-, with a stable outlook. This decision comes as the Turkish economy continues to demonstrate resilience in the face of ongoing regional and international challenges.
Factors supporting the classification
In its statement, the agency attributed this assessment to a number of economic pillars supporting Turkey’s stability. These include low public debt and the maintenance of sustainable debt levels. Furthermore, Turkey possesses a large and diversified economic base. Per capita income has also risen compared to the average for countries within the “BB” rating group. Additionally, Turkey has a historical ability to access external financing, even during periods of economic stress. Turkish banks also have solid foundations that enable them to withstand crises.
Growth and inflation forecasts
Regarding economic indicators, Fitch Ratings estimates the potential growth rate of the Turkish economy at around 4%. It expects the economy to register actual growth of 2.8% this year, rising to 4.4% next year. The agency’s forecasts also point to a downward trajectory for inflation, which is expected to decline from 32% last June to 29.5% by the end of 2026.
Monetary policy and international reserves
The agency praised the Turkish central bank’s recent steps, particularly the 300-basis-point increase in funding costs and the tightening of credit limits. It affirmed that these measures have contributed to the recovery of international reserves following previous interventions to support the lira during tensions in the US-Iran conflict. Fitch expects the country’s total foreign exchange reserves to reach $167 billion by the end of 2026.
Regarding the prospects for a future upgrade, the statement explained that achieving a tangible and sustained increase in foreign reserves, coupled with reduced external financing needs and adherence to a tight monetary policy aimed at curbing inflation, are key factors that could lead the agency to upgrade Turkey’s credit rating in upcoming reviews. These indicators remain a test of the Turkish economy’s ability to balance growth requirements with monetary stability pressures in a turbulent regional environment.
