International credit rating agency Fitch Ratings announced its new forecasts for the Turkish economy. While the institution expects the dollar/TL to reach 51 at the end of 2026 and 60 at the end of 2027, it also predicted that inflation will gradually decline. According to Fitch, annual inflation in Türkiye will be 30.5 percent at the end of 2026 and 23.5 percent at the end of 2027.
LIMITED DECLINE IN INFLATION
Fitch’s inflation forecast is very close to current levels. According to the latest data of TUIK, annual inflation was 31.51 percent in August. The monthly price increase was 1.84 percent. Thus, Fitch’s year-end forecast of 30.5 percent shows that a limited decline in inflation is anticipated in the coming months. The organization did not only provide forecasts regarding inflation and exchange rates. Expecting the Turkish economy to grow 2.8 percent in 2026 Fitch estimates that growth will accelerate to 4.3 percent in 2027. On the other hand, it is noted that high energy prices and inflation expectations may slow down the decline in prices.
25 BILLION DOLLAR INCREASE IN RESERVES
Another area that Fitch drew attention to was the Central Bank reserves. According to the organization, gross foreign exchange reserves increased by approximately 25 billion dollars from the end of March to 23 September, reaching 176 billion dollars. Net reserves excluding swaps increased from 16 billion dollars to 45 billion dollars in the same period. Fitch states that the recovery in reserves and tight monetary policy limit Türkiye’s short-term external risks. Evaluating the liquidation process of approximately 18 billion dollars of investment funds, Fitch announced that the measures taken limited the pressure on the market and that it did not expect the process to have a significant impact on Türkiye’s credit rating. Türkiye’s credit rating is currently at “BB-” and its outlook is at “Stable” level.
THE SITUATION OF TL IS UNDER SPOTLIGHT
According to the table presented by Fitch, the gradual depreciation of the Turkish lira will continue while the decline in inflation continues in the next two years. In the organization’s account, dollar/TL will rise to 51 at the end of 2026 and 60 a year later, while inflation will decrease from 30.5 percent to 23.5 percent. Growth is expected to accelerate from 2.8 percent in 2026 to 4.3 percent in 2027.
