Fitch Upgrades Turkey's Credit Outlook Amid Economic Reforms

On January 23, 2026, Fitch Ratings upgraded Turkey's credit outlook from "stable" to "positive," while affirming its long-term foreign-currency rating at 'BB-'. This decision reflects a significant improvement in Turkey's foreign exchange reserves, which rose to $205 billion in mid-January from $155 billion at the end of 2024. Net reserves, excluding swaps, also showed recovery, increasing to $78 billion from a low of negative $66 billion in early 2024. Fitch attributed this positive shift to a faster-than-expected buildup in reserves, improved reserve quality, and a decline in foreign-currency contingent liabilities.

Fitch upgrades Türkiye outlook to positive, keeps BB- ratingFitch upgrades Turkey's outlook to 'positive' amid rising reserves, economic reformsMinister Simsek: Fitch has changed our country's credit rating outlook to positive, and there may be a rating increase in the upcoming period.

Fitch's report highlights Turkey's efforts to address past economic vulnerabilities, including high inflation and external financing pressures. The agency noted that Turkey's disciplined macroeconomic policies have contributed to these improvements. Despite this progress, concerns remain regarding political risks and high debt servicing needs. Annual inflation in Turkey dipped to 30.89% in December 2025, with food prices rising 28.31% and education and housing costs exceeding 49%. The Turkish government projects inflation to decrease to 16% by the end of 2026, while economists anticipate a more modest decline to 23%.

Fitch upgrades Turkey's outlook to 'positive' amid rising reserves, economic reformsMinister Simsek: Fitch has changed our country's credit rating outlook to positive, and there may be a rating increase in the upcoming period.Fitch upgrades Türkiye outlook to positive, keeps BB- rating

Treasury and Finance Minister Mehmet Simsek expressed optimism about Fitch's decision, suggesting it could lead to a future rating increase. He emphasized the government's commitment to reducing economic vulnerabilities and strengthening macro-financial stability. The Turkish economy is projected to grow by 3.5% in 2026 and 4.2% in 2027.

Minister Simsek: Fitch has changed our country's credit rating outlook to positive, and there may be a rating increase in the upcoming period.Fitch upgrades Turkey's outlook to 'positive' amid rising reserves, economic reformsFitch upgrades Türkiye outlook to positive, keeps BB- rating

In response to Fitch's upgrade, Minister Simsek stated, "This development indicates that there may be a rating increase in the upcoming period." He highlighted three positive developments: the expiration of the Currency Protected Deposit maturities, increased reserve requirement ratios, and ongoing efforts to enhance economic stability. Fitch noted that Turkey's credit rating is supported by its large and diversified economy, low public debt, and a history of maintaining access to external financing.

Minister Simsek: Fitch has changed our country's credit rating outlook to positive, and there may be a rating increase in the upcoming period.Fitch upgrades Türkiye outlook to positive, keeps BB- ratingFitch upgrades Turkey's outlook to 'positive' amid rising reserves, economic reforms

Despite the positive outlook, some economists have expressed skepticism regarding the government's inflation projections. Critics argue that the tight monetary policies may hinder production and economic growth. Additionally, concerns about political stability and governance persist, which could impact investor confidence.

Fitch upgrades Turkey's outlook to 'positive' amid rising reserves, economic reforms

Fitch indicated that Turkey's credit rating could be upgraded if there is increased confidence in the sustainability of the policy framework, a significant strengthening of external buffers, and a reduction in political risks. The agency's future assessments will likely focus on these factors as Turkey continues to navigate its economic challenges.

Minister Simsek: Fitch has changed our country's credit rating outlook to positive, and there may be a rating increase in the upcoming period.