Fitch Senior Director Douglas Winslow Commented on the Turkish Economy

Fitch Senior Director Douglas Winslow answered the questions of CNBC-e London Representative Berfu Güven and made evaluations about the Turkish economy. Stating that the recent shocks did not put pressure on the credit rating, Winslow emphasized that Turkey displayed a resilient stance against external shocks.

Referring to the "fund crisis" allegations that are the focus of the markets, Winslow stated that this development is negative, but they do not expect it to have a direct impact on the general economy and credit rating. Noting that there is no risk of dollarization in the economy due to the fund crisis and that they do not foresee a systemic risk, Winslow stated that public finances are closely monitored, but they believe that the government will not be left behind in this process.

Pointing out that Turkey's attitude towards external shocks is quite resilient, Winslow stated that with the improvement in reserve ownership, the current reserves are at a sufficient level for possible shocks. Stating that they do not expect a sudden change in the credit rating in the next few years, Winslow underlined that the current outlook is maintained.

In the last update, Fitch Ratings confirmed Türkiye's credit rating as "BB-" and maintained its credit rating outlook as "stable".

Evaluating the main trend on the inflation side, Fitch Director said that they expect inflation to decrease to 30.5 percent at the end of the year. Stating that they expect the Central Bank to continue its tight monetary policy, Winslow stated that a 150 basis point interest rate cut may come towards the end of the year.

Sharing his predictions regarding the exchange rate, Winslow noted that they expect the gradual real appreciation in the exchange rate to continue. In this context, he announced that the year-end forecasts for the Dollar/TL exchange rate are 51 liras, and the end-2027 forecasts are 60 liras.

On the other hand, touching on the possibility of a possible election in early 2028, Winslow added that in this process, stimulating effects may be seen in monetary policy, the government may take steps on the credit side and monetary policy may be cautiously loosened.

Emphasizing that capital inflows are of critical importance, Winslow stated that they do not expect a return to the anorthodox policies of the past and that policy makers have learned lessons from previous crises.

Stating that they foresee a slowdown on the growth side in the first quarter of next year, Winslow shared their growth forecast for 2026 as 3.8 percent. He noted that economic activity may accelerate and growth may reach 4.3 percent later next year, depending on possible stimulus and election policies.