Fitch Assessment of the Turkish Economy

Fitch Senior Director Douglas Winslow stated in an evaluation of the Turkish economy that they do not expect the fund investigation to have a direct impact on the credit rating, and they project that inflation will decline by the end of the year.

Fund Investigation and Credit Rating

Fitch Senior Director Douglas Winslow stated that while the fund investigation at the center of market attention is negative, they do not expect it to have a direct impact on the broader economy and credit rating.

Noting that the fund investigation has not created a risk of dollarization in the economy and that they do not foresee a systemic risk, Winslow stated that public finances are being closely monitored.

External Shocks and Reserve Status

Pointing out that Turkey's stance against external shocks is quite resilient, Winslow said that with the improvement in reserve holdings, current reserves are at an adequate level for potential shocks.

Stating that they do not expect a sudden change in the credit rating over the next few years, Winslow underlined that the current outlook is maintained.

Inflation and Exchange Rate Forecasts

The Fitch Director stated that they expect inflation to decline to 30.5 percent by the end of the year, anticipating that the Central Bank will continue its tight monetary policy.

Disclosing that their year-end forecast for the USD/TRY exchange rate is 51 liras and the year-end 2027 forecast is at 60 liras, Winslow noted that gradual real appreciation will continue.

Growth and Future Expectations

Forecasting a slowdown in growth in the first quarter of next year, Winslow shared their growth projection for 2026 as 3.8 percent.

It was stated that economic activity could accelerate in the later periods of next year and growth could reach the level of 4.3 percent.