Credit Rating and Economic Assessment from S&P Global Ratings Turkey Lead Analyst Vartapetov

Karen Vartapetov, Director of Sovereign Ratings for Central and Eastern Europe and the Commonwealth of Independent States and Lead Analyst for Turkey at S&P Global Ratings, stated that the baseline scenarios for the Turkish economy remain valid, noting that the persistence of disinflation and the adequacy of foreign exchange reserves will be decisive for a credit rating upgrade.

Vartapetov stated that the publication of Turkey's credit rating assessment on Monday instead of Friday is a routine practice, intended to prevent market confusion in cases where there is no rating change. S&P continues to affirm Turkey's credit rating at "BB-/B" and its outlook as "stable."

Noting that they expect the disinflation process to continue, Vartapetov emphasized that reducing inflation to low double-digit levels is a realistic target. He also drew attention to the impact of the Central Bank's efforts to accumulate international reserves and the confidence of households in the Turkish lira on the credit rating.

Assessment: According to S&P's estimates, the Turkish economy is expected to grow by 3 percent this year, and inflation is projected to average 30.9 percent by the end of the year. The agency anticipates that the Central Bank may cut interest rates by the end of the year and that the policy rate could be at least 35 percent by year-end.