Fitch affirms Turkey's credit rating

Fitch Ratings has announced its assessment regarding the Turkish economy.

In a statement from the credit rating agency, it was reported that Turkey's long-term foreign currency credit rating was affirmed at "BB-" and its outlook as "stable."

The statement recalled that the Central Bank of the Republic of Turkey (TCMB) has begun a monetary easing cycle by cutting interest rates by 250 basis points twice in a row since last December, bringing the policy rate down to 45 percent, and noted that the policy rate is expected to be reduced to 28 percent by the end of 2025.

Fitch's statement noted that the average annual inflation is projected to fall significantly from 60.2 percent in 2024 to 32.8 percent this year.

Pointing out that international reserves increased by 14 billion dollars last year to reach 155 billion dollars and that their composition has improved significantly, the statement expressed that positive real interest rates, low current account deficits, and capital inflows could support the durability of the improvement in external buffers.

The statement reported that economic growth is estimated to have slowed to 2.9 percent in 2024 and is expected to remain at 2.6 percent in 2025 due to the continuation of tight monetary policy, significant fiscal consolidation, and moderate minimum wage increases. It was noted that the gradual recovery projected in the European Union would support net exports.

Fitch Ratings last upgraded Turkey's credit rating from "B+" to "BB-" in September of last year, while setting the outlook as "stable."