Fitch affirms Türkiye’s credit rating at 'BB-' with stable outlook – Latest News
ISTANBUL
Fitch Ratings has affirmed Türkiye’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at “BB-” with a “Stable” outlook, reflecting cautious optimism about the country’s economic policies and external buffers.
Noting Türkiye’s central bank has begun its monetary easing cycle with two consecutive 250-basis-point cuts to 45 percent, the international credit rating agency projected a further reduction to 28 percent by the end of 2025 while maintaining a tight stance to support disinflation.
Fitch estimated that Türkiye’s GDP growth slowed to 2.9 percent in 2024 and forecasted moderate growth of 2.6 percent in 2025 due to tight monetary policies, fiscal consolidation and a moderate minimum wage increase.
Inflation remains a concern for the country, though Fitch forecasts it will decline materially to 32.8 percent in 2025 from 60.2 percent in 2024.
External buffers have shown improvement, with international reserves rising by $14 billion to $155 billion in 2024. Positive real interest rates, low current account deficits and capital inflows are expected to bolster external buffers, with reserves projected to reach $175 billion by 2026, it said.
The central bank’s net foreign assets also increased, surging to $39 billion in early 2025, supported by reduced financial dollarization, capital inflows and increased external borrowing access.
The current account deficit declined to 0.8 percent of GDP in 2024 and is forecast to average 1.5 percent of GDP in 2025-2026, below the “BB” median of 2.4 percent.
Fiscal consolidation remains a priority, with the central government deficit declining to an estimated 4.8 percent of GDP in 2024 and projected to fall to 3.3 percent in 2025 and 3 percent in 2026, driven by lower earthquake-related spending and increased expenditure discipline among other reasons.
General government debt is expected to remain low at 26.3 percent of GDP, significantly below the “BB” median of 55.2 percent.
Fitch last upgraded Türkiye’s rating from “B+” to “BB-” in September, maintaining a stable outlook.
