Turkey January Inflation Seen at 4.32%, Annual Rate Slows to 30%

Turkey’s monthly inflation rate is expected to jump sharply in January, driven by a minimum wage hike and widespread new-year price adjustments, even as the annual inflation rate is seen easing further, according to a Reuters poll of economists.

The survey showed monthly inflation is forecast to rise to 4.32%, marking a strong rebound after a subdued December reading, while annual inflation is expected to slow to around 30%, extending a gradual disinflation trend.

Turkey Inflation January Boosted by Wage Hike

Economists polled by Reuters expect January’s inflation surge to be fuelled primarily by a 27% increase in the minimum wage for 2026, alongside routine price resets at the start of the year.

Forecasts for monthly inflation ranged between 4.2% and 4.64%, reflecting uncertainty linked to changes in inflation basket weightings and volatility in food prices.

Analysts noted that adjustments to smaller components of the consumer price index, along with food inflation pressures, complicate forecasts for Turkey inflation January, particularly in the early months of the year.

Annual Inflation Seen Slowing Despite Monthly Spike

Despite the sharp monthly rise, the median estimate points to annual inflation easing to 30.0% in January, down from 30.9% in December, with forecasts clustering tightly between 29.9% and 30.4%.

Looking ahead, economists expect annual inflation to continue slowing to around 23% by year-end, although this would remain well above the central bank’s official forecast of 16%.

The Turkish Statistical Institute recently announced a change in the base year for the consumer price index to 2025 from 2003, aligning with European standards, a move that has added further complexity to inflation projections.

Monetary Policy and Disinflation Outlook

Turkey’s central bank cut its benchmark interest rate by 100 basis points last week to 37%, less than markets had expected, citing firm inflation dynamics and pricing behaviour that threaten the disinflation process.

While policymakers said leading indicators point to firmer monthly inflation in January, they stressed that the underlying inflation trend remains contained.

Analysts say inflation data from January onward are likely to remain volatile due to wage increases, food prices and seasonal adjustments, even as tight monetary and fiscal policies continue to support a broader disinflation path for Turkey inflation January and beyond.