Statement on Türkiye from Fitch and Moody's

Fitch Ratings announced its assessment of the Turkish economy.

In a statement, the credit rating agency announced that Türkiye's long-term foreign currency credit rating was confirmed as "BB-" and the rating outlook as "stable."

Addressing policy risks in Türkiye and the weak and strong factors affecting its credit rating, the statement emphasized the country's strengths, such as low public debt, sustainable access to external financing, a resilient banking sector, and a high per capita Gross Domestic Product compared to the "BB" group average.

The statement noted that Fitch's baseline scenario is that policies will remain relatively tight throughout 2026, with some easing expected before the 2028 elections, but that a return to negative real interest rates is not envisaged.

The statement stated that inflation, which fell to 35 percent in June, is expected to decline to 28 percent by the end of 2025 and 21 percent by the end of 2026, but this rate is still high.

The statement stated that the Turkish economy is estimated to grow by 2.9 percent in 2025, 3.5 percent in 2026, and 4.2 percent in 2027.

The statement stated that a permanent decline in inflation and a reduction in the risk of macroeconomic imbalances, supported by increased policy credibility, could lead to an increase in Türkiye's credit rating, while it was emphasized that a significant strengthening of external buffers could also have a positive impact on the credit rating.

In September last year, Fitch Ratings upgraded Türkiye's credit rating from "B+" to "BB-" and set the outlook as "stable."

The credit rating agency had also confirmed Türkiye's credit rating and rating outlook in its assessment in January.

MOODY'S STATEMENT ON Türkiye

Moody's announced that Türkiye's credit rating was raised from "B1" to "Ba3".

The statement stated that the rating upgrade reflects the strengthening performance of effective policy making and, more specifically, demonstrates the Central Bank of the Republic of Turkey's commitment to a monetary policy that permanently alleviates inflationary pressures, reduces economic imbalances, and gradually restores the confidence of domestic depositors and foreign investors in the Turkish lira.

The statement also stated that the rating increase reflects the view that the risk of policy changes has decreased, but this risk will continue in the coming years.

The statement also stated that the credit rating outlook was changed from "positive" to "stable," and that this balanced the upside and downside risks to Türkiye's credit profile.

The statement noted that maintaining the tradition of effective policy making could support the improvement in Türkiye's external position more than anticipated.

The statement emphasized that ongoing and planned structural reforms will further reduce dependence on energy imports and increase export competitiveness, and that this could increase the country's resilience to external shocks.

Moody's raised Türkiye's credit rating by two notches in July last year.

Moody's raised Türkiye's credit rating by two notches from "B3" to "B1" in July 2024, maintaining the credit rating outlook as "positive."

The credit rating agency's calendar for this year set January 24 as the first credit rating review date for Türkiye, but Moody's had not made a decision on Türkiye's credit rating on that date.

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