International credit ratings agency Fitch Ratings has stated that the impact of the ongoing Iran conflict on Turkey and its banking sector will largely depend on the Turkish authorities’ policy response, highlighting rising risks linked to energy prices and market volatility. The agency noted that geopolitical tensions in the Middle East could create additional macroeconomic pressure, though the overall impact remains uncertain and scenario-dependent.
According to Fitch, the resilience of Turkish banks will be closely tied to how policymakers react to the evolving situation. The agency indicated that economic policy measures will play a critical role in limiting potential negative effects on financial stability and credit conditions. Noting that changes in macroeconomic conditions could influence the operating environment for banks, Fitch stated that potential risks include tighter financial conditions, increased funding costs, and pressure on asset quality.
GDP outlook remains stable under baseline scenario
The report indicates that the Iran conflict adds to existing macroeconomic challenges, including inflation and external financing needs, which remain key factors for Turkey’s economic outlook.
Fitch’s baseline scenario assumes that the conflict will be temporary and contained, under which the impact on Turkey’s economy is expected to remain manageable. In its broader sovereign assessment, Fitch projects Turkey’s GDP growth at around 3.5 percent in 2026 and 4.2 percent in 2027. However, the agency indicated that a prolonged period of geopolitical tension could weaken growth through external shocks.
Oil prices and external balances in focus
Fitch highlighted that one of the main transmission channels is through higher oil prices, which could affect Turkey’s macroeconomic indicators.
Turkey is considered relatively exposed to energy price shocks, meaning that sustained increases in oil prices could widen the current account deficit, increase inflationary pressures and put pressure on the exchange rate.
Meanwhile, Mustafa Gültepe, chairman of the Turkish Exporters Assembly, stated that Turkish exports to the Gulf countries have decreased by 40 percent due to the war.