Fitch: Türkiye’s economic outlook stable despite inflation concerns

Türkiye’s sovereign rating remains at ‘BB-‘ with a stable outlook, according to Fitch Ratings. The agency highlights political interference in monetary policy, high inflation, and weaker governance as key credit challenges, though Türkiye benefits from low government debt, external financing access, and a resilient banking sector.

Fitch expects inflation to fall to 32.8 per cent in 2025 from 60.2 per cent in 2024, supported by fiscal consolidation and tight monetary policy. However, risks remain if rapid monetary easing reignites inflation.

External reserves rose to USD 155 billion in 2024, and FX-protected deposits are declining. Türkiye’s fiscal deficit is expected to decrease to 3.3 per cent of GDP in 2025, with government debt remaining low at 26.3 per cent of GDP.

Geopolitical risks and governance issues persist, but Fitch sees potential for an upgrade if inflation continues to decline and external buffers improve.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama