Turkey's credit rating upgraded
Fitch Ratings has upgraded Turkey's credit rating from "B+" to "BB-". Fitch has revised the outlook from positive to stable.
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International credit rating agency Fitch Ratings has upgraded Turkey's credit rating from "B+" to "BB-" while revising the outlook to stable.
Fitch Ratings announced its assessment regarding the Turkish economy. In the statement released by the credit rating agency, it was reported that Turkey's long-term foreign currency credit rating was upgraded from "B+" to "BB-", and the outlook was set as "stable".
The statement noted that positive real interest rates, low current account deficits, and the gradual decline in foreign-exchange-protected deposits would likely support the durability of improvements in external buffers, with reserves projected to reach 158 billion dollars by the end of this year and 165 billion dollars by the end of 2025.
The statement, which noted that monetary tightening has led to a real appreciation of the lira, which is crucial for the authorities' strategy to reduce inflation, stated: "Fitch has greater confidence that a tight monetary policy stance, combined with the projected fiscal consolidation and prudent minimum wage adjustments, will support a significant decline in inflation and help maintain improved external liquidity buffers, low current account deficits, and reduced dollarization."
The statement indicated that inflation is expected to finish this year at 43 percent and is projected to fall to 21 percent by the end of 2025, while the current account deficit is estimated to decline to 1.9 percent of Gross Domestic Product (GDP) this year and average 1.7 percent in 2025-2026.
The statement pointed out that the current economic program continues to receive support from political leadership, but noted that the risk of policy reversals still exists.
The statement reported that the Turkish economy is expected to grow by 3.5 percent this year and 2.8 percent in 2025, and that the projected gradual recovery in the European Union will support net exports.
Fitch Ratings had affirmed Turkey's credit rating as "B" in September last year, while changing the outlook from "negative" to "stable" after 2 years.