Moody’s expects the Turkish inflation to ease to 29 percent at the end of 2026.
Moody’s Ratings has completed a periodic review of the ratings of Türkiye but has not announced a credit rating action.
Moody’s currently rates Türkiye at “Ba3” with a stable outlook. Fitch Ratings earlier this month affirmed the country’s long-term issuer default ratings at “BB-” with a stable outlook.
The ratings company said in a statement that Türkiye’s credit ratings are supported by Türkiye’s large, diversified and dynamic economy and its low government debt burden.
“The track record of effective policymaking has improved since mid-2023, particularly through the central bank’s adherence to a monetary policy framework that is easing inflationary pressures, reducing macroeconomic imbalances and gradually restoring the confidence of domestic depositors and foreign investors in the Turkish Lira,” it said in a statement on July 24.
The spike in global energy prices since the start of the Middle East conflict has challenged Türkiye’s disinflation momentum, according to Moody’s.
“We now expect inflation to end 2026 at 29 percent, higher than previously projected, before easing to 24 percent by the end of 2027,” it said.
Real GDP growth is expected to slow modestly to 3.4 percent in 2026 from 3.6 percent in 2025, mainly driven by weaker external demand and some erosion of household purchasing power due to higher fuel prices, it noted. “We expect growth to accelerate in 2027, ahead of the following year’s presidential and parliamentary elections, driven mainly by fiscal stimulus,” Moody’s said.
The rating could be upgraded if the authorities continue to effectively implement policies and reforms that durably restore macroeconomic stability, reduce the sovereign’s susceptibility to exchange rate and inflation shocks and allow for a structural reduction in external vulnerability risks, it added.
