diff --git a/crates/oxc_isolated_declarations/src/declaration.rs b/crates/oxc_isolated_declarations/src/declaration.rs
index 8c0307326914..5df2773bdd61 100644
--- a/crates/oxc_isolated_declarations/src/declaration.rs
+++ b/crates/oxc_isolated_declarations/src/declaration.rs
@@ -77,7 +77,9 @@ impl<'a> IsolatedDeclarations<'a> {
                     } else {
                         init = Some(self.ast.copy(init_expr));
                     }
-                } else {
+                } else if !decl.kind.is_const()
+                    || !matches!(init_expr, Expression::TemplateLiteral(_))
+                {
                     // otherwise, we need to infer type from expression
                     binding_type = self.infer_type_from_expression(init_expr);
                 }
diff --git a/crates/oxc_isolated_declarations/src/inferrer.rs b/crates/oxc_isolated_declarations/src/inferrer.rs
index ea83c09d9039..153e9153f637 100644
--- a/crates/oxc_isolated_declarations/src/inferrer.rs
+++ b/crates/oxc_isolated_declarations/src/inferrer.rs
@@ -24,13 +24,8 @@ impl<'a> IsolatedDeclarations<'a> {
             Expression::NullLiteral(_) => Some(self.ast.ts_null_keyword(SPAN)),
             Expression::NumericLiteral(_) => Some(self.ast.ts_number_keyword(SPAN)),
             Expression::BigIntLiteral(_) => Some(self.ast.ts_bigint_keyword(SPAN)),
-            Expression::StringLiteral(_) => Some(self.ast.ts_string_keyword(SPAN)),
-            Expression::TemplateLiteral(lit) => {
-                if lit.expressions.is_empty() {
-                    Some(self.ast.ts_string_keyword(SPAN))
-                } else {
-                    None
-                }
+            Expression::StringLiteral(_) | Expression::TemplateLiteral(_) => {
+                Some(self.ast.ts_string_keyword(SPAN))
             }
             Expression::Identifier(ident) => match ident.name.as_str() {
                 "undefined" => Some(self.ast.ts_undefined_keyword(SPAN)),
diff --git a/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts b/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts
index 34e91d499ce7..a188069a364d 100644
--- a/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts
+++ b/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts
@@ -6,4 +6,6 @@ function A() {
 
 const B = () => { return B };
 
-const C = function () {}
\ No newline at end of file
+const C = function () {}
+
+const D = () => `${''}`;
\ No newline at end of file
diff --git a/crates/oxc_isolated_declarations/tests/fixtures/infer-return-type.ts b/crates/oxc_isolated_declarations/tests/fixtures/infer-return-type.ts
index dde956921836..2a489ed8e1a7 100644
--- a/crates/oxc_isolated_declarations/tests/fixtures/infer-return-type.ts
+++ b/crates/oxc_isolated_declarations/tests/fixtures/infer-return-type.ts
@@ -23,5 +23,10 @@ function qux() {
   const a = (() => {
     return 1;
   })();
- return `Hello, world!`;
-}
\ No newline at end of file
+  return `Hello, world!`;
+}
+
+function quux() {
+  return `${''}`
+}
+// Inferred type is string
\ No newline at end of file
diff --git a/crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts b/crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts
index 875168425145..dca3f8568ec6 100644
--- a/crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts
+++ b/crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts
@@ -7,4 +7,8 @@ export const F = {
   b: [`b`]
 } as const
 
-export const BAD = `useCssV${v}ars`
\ No newline at end of file
+export let GOOD = `useCssV${v}ars`
+
+export const BAD = `useCssV${v}ars`
+
+export let BAD2 = `useCssV${v}ars` as const
\ No newline at end of file
diff --git a/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap b/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap
index 1949cf59f2a5..cae808cef8ba 100644
--- a/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap
+++ b/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap
@@ -7,6 +7,7 @@ input_file: crates/oxc_isolated_declarations/tests/fixtures/arrow-function-retur
 declare function A(): unknown;
 declare const B: unknown;
 declare const C: unknown;
+declare const D: () => string;
 
 
 ==================== Errors ====================
@@ -31,8 +32,9 @@ declare const C: unknown;
 
   x TS9007: Function must have an explicit return type annotation with
   | --isolatedDeclarations.
-   ,-[9:20]
- 8 | 
- 9 | const C = function () {}
-   :                    ^
-   `----
+    ,-[9:20]
+  8 | 
+  9 | const C = function () {}
+    :                    ^
+ 10 | 
+    `----
diff --git a/crates/oxc_isolated_declarations/tests/snapshots/infer-return-type.snap b/crates/oxc_isolated_declarations/tests/snapshots/infer-return-type.snap
index 10baf48c509a..a7cd26e84a9f 100644
--- a/crates/oxc_isolated_declarations/tests/snapshots/infer-return-type.snap
+++ b/crates/oxc_isolated_declarations/tests/snapshots/infer-return-type.snap
@@ -8,6 +8,7 @@ declare function foo(): number;
 declare function bar(): number | undefined;
 declare function baz();
 declare function qux(): string;
+declare function quux(): string;
 
 
 ==================== Errors ====================
diff --git a/crates/oxc_isolated_declarations/tests/snapshots/infer-template-literal.snap b/crates/oxc_isolated_declarations/tests/snapshots/infer-template-literal.snap
index b869fbd280c0..fcef01f361c4 100644
--- a/crates/oxc_isolated_declarations/tests/snapshots/infer-template-literal.snap
+++ b/crates/oxc_isolated_declarations/tests/snapshots/infer-template-literal.snap
@@ -10,15 +10,26 @@ export declare const F: {
 	readonly a: 'a';
 	readonly b: readonly ['b'];
 };
+export declare let GOOD: string;
 export declare const BAD: unknown;
+export declare let BAD2: unknown;
 
 
 ==================== Errors ====================
 
   x TS9010: Variable must have an explicit type annotation with
   | --isolatedDeclarations.
-    ,-[10:14]
-  9 | 
- 10 | export const BAD = `useCssV${v}ars`
+    ,-[12:14]
+ 11 | 
+ 12 | export const BAD = `useCssV${v}ars`
     :              ^^^
+ 13 | 
+    `----
+
+  x TS9010: Variable must have an explicit type annotation with
+  | --isolatedDeclarations.
+    ,-[14:12]
+ 13 | 
+ 14 | export let BAD2 = `useCssV${v}ars` as const
+    :            ^^^^
     `----