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Fitch's outlook cut on Turkey flags growing economic strain
April 10 (Reuters) – Credit rating agency Fitch revised Turkey’s outlook to “stable” from “positive”, citing a sharp erosion in foreign exchange reserves due to heavy intervention to support the lira and rising risks from the Iran conflict.It, however, affirmed Turkey’s long-term foreign-currency rating at “BB-“.The agency flagged persistent macroeconomic vulnerabilities, including high inflation, large external financing needs and weak reserve buffers despite earlier improvements.It added that Turkey’s external debt remained high relative to its reserves, while inflation, although easing, continues to run well above that of its peers.Geopolitical risks have added to the pressure, with Fitch warning that a prolonged conflict involving Iran could push up energy prices, widen the current account deficit and complicate the disinflation process.“A more protracted conflict would further pressure Turkiye’s external finances and inflation, mainly due to its sizeable energy trade deficit,” Fitch said in the report.The ratings agency had upgraded the country’s outlook to “positive” in January.(Reporting by Atharva Singh in Bengaluru; Editing by Anil D’Silva)
We Asked a Panel of Economists to Forecast the War's Impact
Few think the conflict will derail a resilient economy, but inflation, growth and jobs are all expected to take a hit.
War Darkens Global Economic Outlook and Reshapes Policy Priorities - IMF
The conclusion is sobering: beyond its human toll, war imposes large, persistent economic costs and difficult trade-offs. Beyond active conflicts, geopolitical tensions are reshaping an increasingly multipolar world with waves of trade restrictions imposed by all major economic blocs, harming international cooperation and growth.
IMF cuts Turkey 2026 economic growth forecast on weaker momentum ...
The International Monetary Fund cut its economic growth forecast for Turkey to 3.4% from 4.2% for this year, citing weaker-than-expected activity in 2025 and the drag from higher oil and gas ...
