12.11.2026 11:41
The Central Bank’s raising its year-end 2026 inflation forecast from 28 percent to 29.5 percent has also updated the calculations for the minimum wage increase to be made in January 2027. If an increase equal to the new forecast is made, the net minimum wage will rise from 28,075 lira to 36,358 lira, and the gross minimum wage from 33,030 lira to 42,774 lira. This figure corresponds to an increase of 421 lira more per month compared to the previous forecast.
The new forecasts announced by Fatih Karahan, Governor of the Central Bank of the Republic of Türkiye (CBRT), in the year’s final Inflation Report created a new reference for the minimum wage increase awaited by millions of workers. The increase scenarios discussed in October, ranging from 25 percent to 35 percent, were recalculated with current data.
CBRT RAISED ITS FORECASTS
At the “Inflation Report 2026-IV” briefing held in Istanbul, Karahan announced that they had raised the 2026 year-end inflation forecast to 29.5 percent. The previous report’s forecast of 28 percent for 2026 was increased by 1.5 points. The CBRT raised its end-2027 intermediate target from 15 percent to 21 percent and its end-2028 intermediate target from 9 percent to 13.5 percent. Inflation is projected to decline to 9 percent by the end of 2029 and stabilize at 5 percent in the medium term.
Annual inflation in October was 29.8 percent.
HOW MUCH WILL THE NET WAGE BE WITH A 29.5 PERCENT INCREASE?
In 2026, if the minimum wage, which was set at a net 28,075 lira 50 kuruş and a gross 33,030 lira with a 27 percent increase, is raised by the CBRT’s new year-end forecast—that is, 29.5 percent—the net wage will rise to 36,357 lira 77 kuruş. The gross minimum wage will be 42,773 lira 85 kuruş. In this scenario, the worker’s monthly net earnings will increase by 8,282 lira 27 kuruş.
Based on the 28 percent forecast in the previous report in August, the net minimum wage was calculated at 35,936 lira 64 kuruş. With the new forecast, the difference between the two scenarios reached 421 lira 13 kuruş per month.
ALL SCENARIOS ON THE TABLE
According to calculations based on the current minimum wage, the net and gross minimum wage at different increase rates are as follows:
- 25 percent increase: Net 35,094 lira 38 kuruş, gross 41,287 lira 50 kuruş
- 28 percent increase (CBRT’s previous forecast): Net 35,936 lira 64 kuruş, gross 42,278 lira 40 kuruş
- 28.4 percent increase (MTP forecast): Net 36,048 lira 94 kuruş, gross 42,410 lira 52 kuruş
- 29.5 percent increase (CBRT’s new forecast): Net 36,357 lira 77 kuruş, gross 42,773 lira 85 kuruş
- 29.63 percent increase (October Market Participants Survey): Net 36,394 lira 27 kuruş, gross 42,816 lira 79 kuruş
- 30 percent increase: Net 36,498 lira 15 kuruş, gross 42,939 lira
- 33.7 percent increase (increase in the tax exemption in the budget): Net 37,536 lira 94 kuruş, gross 44,161 lira 11 kuruş
- 35 percent increase: Net 37,901 lira 93 kuruş, gross 44,590 lira 50 kuruş
OCTOBER FORECASTS ALIGN WITH NEW DATA
In the calculations made in October, the 28.4 percent year-end inflation forecast in the Medium-Term Program (MTP) and the 29.63 percent expectation in the CBRT’s Market Participants Survey stood out. The CBRT’s new forecast rose to a level quite close to the market expectation.
Experts’ assessments in October and November also point to different rates. Social security expert Özgür Erdursun said in October that he expected an increase of around 25 percent. Social security and labor law expert İsa Karakaş predicted that the increase rate would not remain below 30 percent. Social Security Expert Emin Yılmaz also considered 30 percent the strongest possibility.
In the 2027 budget, increasing the resources allocated for the minimum wage tax exemption from 1 trillion 92 billion lira to 1 trillion 460 billion lira corresponds to an increase of approximately 33.7 percent. However, it is noted that this does not mean the increase in the budget item will be reflected in the minimum wage at the same rate.
KARAHAN: WE WILL MAINTAIN OUR TIGHT STANCE
Saying in his presentation that the improvement in the underlying trend of inflation had become more evident, Karahan emphasized that monetary policy would nevertheless not be loosened. Karahan said, “We will maintain our tight monetary policy stance, which will ensure that inflation declines in line with our intermediate targets.”
Karahan stated that crude oil and natural gas prices had risen significantly in September and October, and that energy prices were decisive in the course of inflation throughout 2026. Warning that if the increase in energy prices becomes permanent, it could create indirect effects on the prices of other goods and services, Karahan also noted that risks in alternative trade routes to the Strait of Hormuz were increasing freight costs.
DEMAND CONDITIONS SUPPORT DISINFLATION
Karahan stated that the capacity utilization rate remained below historical averages and that demand conditions would continue to support disinflation. He said that food inflation had declined with the improvement in supply conditions, but volatility continued. Karahan, noting that after developments in the fund market, most of the money leaving funds moved into deposits, announced that the weighted average funding cost had fallen by a total of 400 basis points.
WHEN WILL THE NEW MINIMUM WAGE BE ANNOUNCED?
The minimum wage that will apply in 2027 is expected to be determined after the meetings of the Minimum Wage Determination Commission in December. Last year, the 2026 minimum wage was announced on December 23. The commission’s decision will be shaped by the year-end inflation realization, November and December inflation data, and the government’s 2027 targets.