Fitch Ratings Announces Inflation and Exchange Rate Projections for Turkey
International credit rating agency Fitch Ratings has shared its inflation, growth, and exchange rate forecasts for the Turkish economy for 2026 and 2027 with the public.
While Fitch Ratings kept Turkey's credit rating at "BB-" and its outlook as "Stable", it updated its inflation, growth, and USD/TRY exchange rate forecasts for the coming years.
Credit Rating and Outlook
Fitch Ratings announced that it has maintained Turkey's credit rating at "BB-" and its outlook at the "Stable" level. It was pointed out that the high inflation environment and potential external shocks complicate the economic rebalancing process.
Policy Risks and Reserves
Policy choices amid high inflation, pre-election policy risks, and the possibility of capital flight were cited among the factors that could put pressure on foreign exchange reserves. It was noted that gross foreign exchange reserves have increased since April.
Changes in Foreign Exchange Reserves
It was announced that gross foreign exchange reserves have increased by $25 billion since the end of March, rising to $176 billion as of September 23. Net reserves excluding swaps reportedly rose to $45 billion.
Current Account Deficit and Growth Expectations
Driven by the effects of the Iran war, the current account deficit-to-GDP ratio is projected to rise from 1.9 percent in 2025 to close to 3 percent in 2026. The Turkish economy is estimated to grow by 2.8 percent in 2026 and 4.3 percent in 2027.
Inflation and Exchange Rate Forecasts
The agency set its year-end inflation expectations at 30.5 percent for 2026 and 23.5 percent for 2027. The USD/TRY parity is expected to reach 51 by the end of 2026 and 60 by the end of 2027.