The global credit rating agency Fitch predicted that the size of the debt market in Turkey would record a qualitative leap to exceed the $540 billion mark by the end of this year, driven by a range of local and global economic factors that enhance the attractiveness of Turkish debt instruments.
This rapid growth comes amid rising external financing needs for the country, and coinciding with large anticipated debt repayments, which is pushing financial and governmental institutions towards diversifying funding sources to ensure liquidity sustainability.
A more flexible financing environment
The agency noted in its report that economic forecasts point to a shift in monetary policy, with the Turkish central bank likely to begin cutting interest rates in line with the US Federal Reserve. This anticipated shift would create a more favorable financing environment, reducing borrowing costs and encouraging further issuance in international markets.
Türkiye is the fourth largest issuer of debt in emerging markets
According to Fitch data, the Turkish debt market witnessed remarkable growth of 13.5% to reach $503 billion by the end of 2025. In a related context, new issuances rose by about 12% to record $140 billion, which consolidated Turkey’s position as a major player in global financial markets, as it ranked fourth as the largest issuer of dollar-denominated debt in emerging markets (excluding China) during the past year.
Economic context and policy shift
This activity in the debt market reflects the growing confidence of international investors in the Turkish economy, particularly following the recent return to orthodox economic policies adopted by the Turkish government to combat inflation and control the budget deficit. These policies have contributed to improving Turkey's credit rating outlook, paving the way for Turkish banks and companies to return strongly to global debt markets.
Expected impacts locally and internationally
This expansion in the debt market is expected to bolster the Turkish central bank's foreign exchange reserves and provide the necessary liquidity for the private sector to finance expansion and investment projects. Internationally, Turkish debt instruments remain an attractive option for portfolio managers seeking high returns in a global economic environment trending towards lower interest rates, which will further encourage foreign capital inflows into Turkish markets in the coming period.
