Summary: A Reuters poll of economists indicates a sharp month-on-month increase in Turkey's consumer prices for January, driven principally by a 27% minimum wage increase for 2026 and a suite of new-year price adjustments. While monthly inflation is expected to spike, the median forecast among 12 economists points to a slowing in the annual inflation rate to 30.0% in January, down from December's 30.9%.
Poll results and forecasts
The poll's median forecast places monthly inflation at 4.32% for January. Individual estimates for the month range from 4.2% to 4.64%. For the year-on-year measure, the poll's median projects a fall to 30.0% in January, with the full spread of forecasts running from 29.9% to 30.4%. Looking further ahead, the poll's central estimate anticipates annual inflation slowing to 23% by the end of the year - a level that would still sit well above the central bank's own forecast of 16%.
Economists participating in the poll flagged that the annual recalculation of weightings in the inflation basket - due to be set this month - complicates forecasting. They also highlighted the role of food price developments in determining January's outcome.
Statistical revisions and methodology
The national statistics institute has said the base year for the consumer price index will move to 2025 from 2003, aligning the index with European standards. The institute noted that the weightings for the main groups in the inflation basket will remain unchanged this year, although smaller groups within the basket will see adjustments.
Monetary policy context
Policy decisions by the central bank have been a key backdrop to the inflation debate. Last week the central bank trimmed its policy rate by 100 basis points to 37%, a smaller reduction than some had expected. In its announcement, the bank cited evidence of firming monthly inflation and cited pricing behaviour and expectations that, in its view, pose risks to the disinflation process.
The central bank assessed that leading indicators point to a firming in monthly consumer inflation in January, though it judged that the rise in the underlying inflation trend remains limited.
The recent rate-cutting cycle followed a brief policy reversal earlier last year. Rate cuts resumed in July with a 300-basis-point reduction, then continued with subsequent cuts of 250 basis points and 100 basis points in October amid rising food costs. The pace of easing included two further reductions - 150 basis points in December and 100 basis points in January.
Trajectory and recent inflation developments
Authorities point to tighter monetary and fiscal stances as contributing to a fall in inflation to 30.9% in December, down from an annual peak of 75% in 2024. Month-on-month consumer prices recorded a modest 0.89% rise in December. Nonetheless, analysts expect readings from January onward to show more variability given several new-year price updates and the 27% increase in the minimum wage for 2026.
Investment bank commentary in the poll highlighted persistent sources of inflationary pressure. Morgan Stanley said weather-related shocks to food prices and stickiness in services inflation have halted progress in reducing the underlying inflation trend since May 2025. The bank set out a gradual disinflation path in a recent note, expecting inflation to ease to 21.7% by end-2026 and to 17.7% by end-2027. Morgan Stanley said this outlook is supported by a stable FX environment, moderate domestic demand and improving inflation expectations.
Data calendar
The Turkish Statistical Institute will publish December inflation data at 0700 GMT on February 3. Analysts and markets will watch that release closely for confirmation of recent trends and for further evidence of how the minimum wage rise and new-year price changes have affected consumer prices.
Key details from the poll:
- Median monthly inflation forecast for January: 4.32% (range: 4.2% - 4.64%).
- Median annual inflation forecast for January: 30.0% (range: 29.9% - 30.4%).
- Median year-end 2026 annual inflation forecast: 23%, above the central bank's 16% forecast.
This outlook frames policymakers, businesses and households confronting a period of likely volatility in reported inflation numbers while longer-term disinflation remains gradual according to private-sector forecasts.