Fitch Ratings maintains Turkey's BB- credit rating with stable outlook

Fitch Ratings has maintained Turkey’s credit rating at 'BB-' with a 'stable' outlook, noting that while tight monetary and fiscal policies have helped manage risks from high energy prices, challenges remain. The agency highlighted that Turkey’s gross foreign exchange reserves rose to $176 billion as of September 23, a $25 billion increase since the end of March, though this remains below the $210 billion level seen prior to the Iran conflict and below the 5.2-month median for 'BB' rated countries.

Regarding inflation and currency, Fitch projects inflation to reach 30.5% by the end of 2026 and 23.5% by the end of 2027. The agency forecasts the USD/TRY exchange rate to reach 51 by the end of 2026 and 60 by the end of 2027.

The current account deficit is expected to rise from 1.9% of GDP in 2025 to approximately 3% in 2026, driven by the impact of the Iran conflict and potential increases in oil prices. Fitch anticipates that a $20 per barrel increase in average annual oil prices could add more than 1 percentage point to the deficit relative to GDP. However, the deficit is expected to stabilize in 2027 as higher import demand is balanced by lower projected oil prices, which are expected to drop from an average of $87 in 2026 to $70 in 2027.