Fitch Affirms Turkey's 'BB-' Credit Rating, Stable Outlook

International credit rating agency Fitch Ratings has affirmed Turkey's credit rating at 'BB-' and maintained a stable outlook. The agency highlighted several factors supporting the rating, including Turkey's low public debt, its large and diversified economy, and a higher per capita income compared to countries in the 'BB' rating category. Fitch also noted the country's history of maintaining access to external financing during periods of stress and the resilience of its banking sector.

Fitch projects Turkey's potential growth rate to be around 4%, with economic growth expected to reach 2.8% this year and 4.4% in 2025. Inflation, which stood at 32% in June, is forecast to decline to 29.5% by the end of 2026. The agency acknowledged the Turkish Central Bank's recent steps, including a 300 basis point increase in funding costs and tighter credit limits, which have helped stabilize the lira and partially restore international reserves.

Gross foreign exchange reserves are expected to reach $167 billion by the end of 2026. Fitch indicated that a significant strengthening of the country's external buffers, particularly with a sustainable reduction in external financing needs, coupled with the maintenance of a tight policy stance supporting disinflation, could lead to an upgrade in the credit rating.