"After the minimum wage, all eyes are on the data to be announced tomorrow."

The minimum wage increase that millions of workers have been waiting for has been announced. The minimum wage, which will be valid as of 2025, has been set at 22,104 lira. The announcement of the minimum wage before the expected date has drawn attention. Economists stated that the surprise announcement is linked to the possibility that the Central Bank (TCMB) will cut interest rates. Following the new minimum wage, which is significantly below worker demands, experts are certain that the Central Bank will opt for an interest rate cut in the decision to be announced tomorrow.

ALL EYES ON TOMORROW'S DATA

The Central Bank of the Republic of Turkey (TCMB) will convene tomorrow under the chairmanship of Central Bank President Fatih Karahan. On the same day at 14:00, the last interest rate decision of the year will be announced. In the last month's Monetary Policy Committee (PPK) meeting, the policy rate was kept stable at 50%.

EXPECTATIONS FOR THE CENTRAL BANK'S INTEREST RATE DECISION

Among the economists participating in the expectation survey for the PPK meeting, 4 predicted that the policy rate would remain unchanged, while 10 anticipated a cut. The average expectation of economists was for a reduction of 150 basis points, bringing the rate down to 48.50%. According to the survey results, economists' expectations for the policy rate ranged between 47.50% and 50.00%. The average expectation for the policy rate by the end of 2025 among economists was 29.50%.

JP MORGAN'S INTEREST RATE CUT PREDICTION

As attention turns to a possible interest rate cut following the minimum wage decision, U.S.-based investment bank JPMorgan has predicted, "We expect a measured interest rate cut this month." JPMorgan stated that they expect the TCMB to start its gradual interest rate cut process with a 150 basis point reduction to 48.5% at the Monetary Policy Committee meeting on Thursday, December 26.

According to a report by Dünya newspaper, JP Morgan stated, "After five consecutive months of upward inflation surprises, it is likely that the TCMB will make a measured interest rate cut this month," and emphasized that they expect three 150 basis point cuts from the TCMB in the first quarter of 2025.

PREDICTION OF A REDUCTION TO 30%

JP Morgan also indicated that they believe the TCMB will implement a 200 basis point cut at each PPK meeting starting from April and will reduce the interest rate to 30% by the end of the year. However, the bank stated, "Since the risks regarding inflation are upward, we see risks for higher interest rates for a longer period in 2025."

JP Morgan noted that they expect the headline CPI to be 1.5% on a monthly basis in December and that the CPI is expected to decline from 47.1% in November to 45.0% by the end of this year. JP Morgan stated, "Although it is likely that the inflation momentum will slow down in December, we expect wages to rise in the first quarter of 2025 due to managed prices and automatic tax increases."