The Turkish debt capital market (DCM) is expected to expand further, with the outstanding DCM likely to reach $550 billion by 2027 despite market volatility, Fitch Ratings said in a new assessment.
"Growth will be driven by high external financing needs, upcoming maturities, fiscal deficits and funding diversification goals. However, market volatility and reduced external buffers could constrain activity and keep funding costs high," the rating agency said on Tuesday.
The growth would be supported by the rise in sukuk issuance, which has outpaced bonds, according to the agency.
Turkish outstanding DCM rose to over $526 billion at the end of the third quarter, up 4% year-over-year, while DCM issuance fell to $115.3 billion in nine months of the year.
"The decline was driven by bond issuance falling by 8% year-on-year. In contrast, sukuk issuance rose by 46% year-over-year, lifting its share of DCM issuance to 16% in nine months from 11% in three quarters of 2025," Fitch said.
Turkiye was the third-largest emerging-market U.S. dollar debt issuer in January-September, excluding China, and one of three G-20 countries active in the sukuk market, the report also said.
The yield spread between Turkish 10-year dollar sovereign bonds and U.S. Treasuries narrowed from their March peak, and rated sukuk liquidity also improved. However, both remain weaker than prewar January levels, it added.
