Turkish Economic Outlook: Rating Agency Confirms ‘BB-‘ Stable, But Commerzbank Forecasts Lira at 57.0 by 2027

Capital Intelligence (CI) Ratings affirms Turkey’s BB- credit rating with a Stable outlook, citing progress in macroeconomic stability. Simultaneously, German lender Commerzbank releases a stark new forecast, predicting the USD/TRY exchange rate to hit 57.0 by December 2027.

ISTANBUL — The dual dynamics of Turkey’s economic normalization were highlighted this week as a credit ratings decision affirmed stability, even as a major German bank released a highly pessimistic long-term forecast for the Turkish Lira.

Capital Intelligence (CI) Ratings has confirmed Turkey’s long-term foreign and local currency credit ratings at BB-, with the short-term ratings maintained at B. Crucially, the rating outlook was held at Stable.

CI Ratings stated that the ratings reflect the “progress achieved in macroeconomic stability,” underpinned by the continuing cautious monetary and fiscal policies being implemented by the government. The firm noted that these policies are contributing to a reduction in inflation and dollarization, despite both remaining at elevated levels.

Inflation and Growth Projections

The ratings agency anticipates a gradual decline in price pressures:

• Average Inflation: Expected to ease to 35% this year and further to 25% next year.
• Economic Growth: Average economic growth is projected at 3.6% for the 2025-2027 period.

The Stable outlook signals that CI Ratings does not expect a rating change within the next 12 months, reflecting a balance between improving macroeconomic stability and the persistent challenges of high inflation and low external reserves.

Potential for Upgrade: An upgrade would require a significant increase in external reserves or a strengthening of coordination between fiscal and monetary policies.

Risk of Downgrade: The rating could be revised downwards if the government were to abandon its current policy path or if a severe decline in investor confidence were to occur.

Commerzbank Sees Steep Lira Depreciation Ahead

In sharp contrast to the stable credit rating outlook, German banking giant Commerzbank has released updated projections for the Turkish Lira that predict a substantial, sustained devaluation in the coming years.

The bank forecasts a cumulative depreciation of approximately 30% for the USD/TRY pair by the end of 2026 under the assumption of continued gradual policy adjustments.

Commerzbank FX Forecasts

The release of these specific, long-dated forecasts highlights the divergence between credit market assessments, which focus on solvency and policy commitment, and foreign exchange market expectations, which are pricing in the persistent inflation differential between Turkey and its trade partners. The projections signal that while policymakers may be on the right track, the cost of inflation control will continue to manifest in a steadily weakening national currency.