Japan’s R&I upgrades Türkiye sovereign rating to BB, cites stable outlook

Japan-based credit rating agency Rating and Investment Information (R&I) raised Türkiye’s sovereign credit rating on Friday, lifting its long-term foreign currency rating from BB- to BB, the first upgrade since 2018. The agency affirmed the outlook as “stable,” citing enhanced macroeconomic policies and stronger economic fundamentals.

Economic growth and fiscal discipline

R&I noted that Türkiye’s government has maintained fiscal discipline to curb inflation while gradually improving the fiscal balance. Despite a controlled economic slowdown, the agency expects sustainable growth, supported by Türkiye’s favorable demographics and long-term growth prospects. Earthquake-related spending has not prevented a decline in the budget deficit-to-GDP ratio, and the primary fiscal balance is projected to return to surplus.

External balance and financial resilience

The agency highlighted improvements in Türkiye’s external position, including a narrowing current account deficit, robust capital inflows, and growing foreign exchange reserves. The banking sector was cited for its strong capital adequacy, solid profitability, and low non-performing loan ratios, signaling resilience amid global financial pressures.

Investor confidence and outlook

R&I described Türkiye’s relatively low public debt ratio compared with peers as a stabilizing factor, reinforcing debt sustainability. The rating upgrade is expected to boost international investor confidence, reflecting recognition of Türkiye’s ongoing reforms and prudent economic policy framework.