International credit rating agency Fitch Ratings has kept Türkiye’s long-term sovereign credit rating at “BB-“ with a stable outlook.
The agency noted that the public debt-to-GDP ratio was relatively low at some 23.8% in 2025 and the banking system was very resilient. Despite the challenges of high inflation, external financing risks and an economic growth slowdown, these continue to be positive factors for the country’s overall credit profile.
However, high inflation has been a great limitation. All sovereigns rated by the agency saw annual inflation rates fall above 30% in June, with the highest rate recorded by the Republic of Chad at 32.1%. Inflation is forecast to fall to 29.5% by the end of 2026 and to end at 18% by end-2028, says Fitch.
Central Bank Policies and Future Economic Outlook
Türkiye’s economic growth in 2026 will be projected at 2.8% then increasing to 4.4% in 2027. In the meantime, the Central Bank of the Republic of Türkiye has made severe efforts towards stabilizing the economy. The 300-basis-point hike in funding costs and the new loan regulations have been effective in building up foreign exchange reserves, which were sapped during the early measures as a result of the U.S.-Iran confrontation.
According to Fitch, these gross foreign exchange reserves will increase from $163.2 billion to $167 billion by the end of 2026. But the nation’s reserve coverage is projected to stay lower than the average of other countries rated ‘BB’. In addition, the current account deficit is expected to increase from 1.5% of GDP in 2025 to 3% in 2026 due to a rise in imports, and the decline in energy and tourism balances.
With anticipated elections towards the end of 2027, Fitch anticipates that the Presidency of the Republic of Türkiye and its administration will provide some fiscal and credit support. Most importantly, the agency does not expect the old, unconventional economic policies that have been dropped ever to be reintroduced in the wake of the current disinflation program that began in mid-2023. But the country’s track record of abrupt changes to economic policy continues to leave policy risks in place.
A rating upgrade would be likely if the country does increase its external buffers, decrease financing demand and maintain policies that bring down inflation. On the other hand, a decline in foreign reserves, a new round of policy easing or a deterioration in the security situation could lead to a downgrade.
This ruling follows other leading credit agencies, who have also rated the bond as ‘a’. S&P Global Ratings have also rated Türkiye “BB-“, with a stable outlook, and Moody’s rates the country “Ba3,” also with a stable outlook.
