S&P raises Türkiye's rating to BB- with stable outlook

ISTANBUL

Treasury and Finance Minister Mehmet Şimşek welcomed Standard & Poor's (S&P) decision to raise Türkiye's credit rating, highlighting the country's unique achievement of receiving two-notch upgrades from three major credit rating agencies this year.

S&P upgraded Türkiye's long-term sovereign credit rating to BB- from B+ with a stable outlook on Friday, citing the country's economic rebalancing efforts.

"The rating upgrade was driven by the rebalancing in the economy, the declining current account deficit and external financing need, the stability of the Turkish lira, strengthening reserves and the disinflation process," Şimşek stated on social media.

The minister emphasized that the positive developments, achieved through the government's economic program, have lowered Türkiye's risk premium and significantly improved its external borrowing costs.

S&P attributed the upgrade to the Central Bank of Türkiye's tight monetary stance, which has helped stabilize the lira, reduce inflation, rebuild reserves, and de-dollarize the financial system. The agency noted a narrowing of Türkiye's savings gap with the rest of the world, reflected in a 4 percentage point GDP decline in the current account deficit since 2022.

While projecting a slight easing of real GDP growth to 2.3% in 2025 from 3.1% this year, S&P anticipates a gradual economic recovery from 2026.

Upgrade marks a significant endorsement of Türkiye's recent economic policies and could potentially boost investor confidence in the country's financial markets.