ISTANBUL

Japan-based Rating and Investment Information upgraded Türkiye’s sovereign credit rating by one notch Friday, marking its first increase for the country in eight years.

R&I raised Türkiye’s long-term foreign currency rating to “BB” from “BB-” and affirmed the outlook at “stable,” citing improving macroeconomic policies and stronger economic fundamentals.

“The government is pursuing policies focused on maintaining discipline, aiming to contain inflation. The fiscal balance has improved and the government debt ratio remains at a low level. The central bank's continued tight monetary policy led to a slowdown in the economy, but a certain level of growth is likely to be sustained,” the agency said in a statement.

R&I said it expects economic growth to continue at sustainable levels despite a controlled slowdown, supported by Türkiye’s demographic profile and long-term growth potential.

The agency also highlighted improvements in the external balance, noting a narrowing current account deficit, stronger capital inflows and rising foreign exchange reserves, both in volume and composition. It said those developments have helped reduce external vulnerabilities.

R&I pointed to resilience in the financial sector, citing strong capital adequacy, solid profitability and low non-performing loan ratios in the banking system.

On public finances, the agency noted progress in fiscal consolidation despite earthquake-related spending, saying the budget deficit-to-GDP ratio has declined and the primary balance is expected to return to surplus. It described Türkiye’s relatively low public debt ratio compared with peer economies as a key anchor for debt sustainability.

The upgrade signals renewed international confidence in Türkiye’s economic policy framework and may further support investor sentiment.