Fitch upgrades Turkey's credit rating

International credit rating agency Fitch Ratings has upgraded Turkey’s credit rating from “B” to “B+”, while changing the outlook from “stable” to “positive”. Fitch Ratings has upgraded Turkey’s credit rating from “B” to “B+”, while changing the outlook from “stable” to “positive”. It was stated that the upgrade in the rating reflects the effectiveness of the policies implemented since June 2023, including the front-loaded tightening in monetary policy, and the decrease in macroeconomic and external vulnerabilities. The statement conveyed that the positive outlook reflects Fitch’s expectation that Turkey’s general macroeconomic policy stance will be consistent with the significant decline in inflation and that external vulnerabilities will continue to decrease in terms of a lower current account deficit and stronger liquidity buffers. The report stated that inflation expectations have eased and external liquidity risks have decreased. It was estimated that inflation will be 58 percent on average in 2024 and 40 percent by the end of the year. It was stated that the tight policy mix, which has a stronger impact on domestic demand and private consumption after the first quarter of 2024, combined with relatively weak external demand, will cause growth to slow to 2.8 percent this year. The 2025 expectation is 3.1 percent. The institution also predicted that the results of the local elections will not lead to a policy change. Fitch last revised the outlook from negative to stable on September 8, 2023. According to Fitch's calendar, the next assessment for Turkey is planned for September 6.