Türkiye is likely to remain a major global sukuk and emerging-market debt issuer in 2026, driven by high external financing needs, upcoming maturities, wider fiscal deficits and efforts to diversify funding sources, Fitch Ratings said in a new report.
Fitch said sovereign issuance will continue to dominate the sukuk market, while banks and corporates are expected to access capital markets opportunistically. However, investor sentiment and volatility linked to the war in Iran could limit issuance activity, it said, adding that Türkiye’s hosting of COP31 and the new National Green Finance Strategy could support ESG debt growth.
“Foreign investor demand for recent Turkish sovereign U.S. dollar sukuk and bonds remained intact, but foreign participation in the local-currency market is falling. Most Fitch-rated Turkish sukuk are rated ‘BB-’ with no defaults,” said Bashar Al Natoor, Fitch’s Global Head of Islamic Finance.
Türkiye’s debt capital market continued to expand despite war-related volatility, with outstanding debt exceeding $516 billion at the end of the first half of 2026, up 9 percent year-on-year, according to the report.
Fitch said Türkiye ranked as the sixth-largest emerging-market U.S. dollar debt issuer, excluding China and the fifth-largest sukuk market globally during the period.
Fitch said spreads on Türkiye’s 10-year dollar-denominated sovereign bonds widened after the outbreak of the Iran war but returned to around pre-war levels in June and July. The agency added that Turkish-dollar sukuk were, on average, more liquid than dollar bonds, although liquidity in both markets weakened after the conflict began.
