S&P says household confidence in lira remains resilient

ISTANBUL

S&P’s stable outlook reflects its assessment that Türkiye can withstand the energy price shock from the Middle East war, provided authorities maintain tight monetary and wage-setting policies and avoid further depleting foreign exchange reserves.

Higher energy prices are putting upward pressure on inflation, which the agency forecasts will average 30.9 percent this year and 21.7 percent in 2027.

Economic growth is projected to slow to 3 percent this year from 3.7 percent in 2025, before recovering to 3.7 percent in 2027.

The war has lowered S&P’s 2026 growth forecast by 0.4 percentage points from its previous estimate.

The budget deficit is expected to approach 3 percent of gross domestic product this year, up from 2.6 percent in 2025, while public debt is forecast to remain below 30 percent of GDP.

S&P last affirmed Türkiye’s BB-/B sovereign credit ratings with a stable outlook in April. It did not publish a review on its scheduled assessment date of Oct. 16.