Minimum wage forecast from famous bank: Morale will be dampened!

In a comprehensive economic assessment published by HSBC, Turkey's growth expectation for 2026 is estimated at around 3.5 percent. The report states that maintaining growth within the 3–4 percent band will be a priority for economic management.

The analysis indicates that year-end inflation is expected to close at the 32 percent level, while headline inflation is projected to fall to 20 percent by the end of 2026. It was noted that strong domestic demand, high inflation expectations, and limited appreciation in the real effective exchange rate could slow the reduction of price pressures.

It was recalled that the Central Bank's inflation forecast range for the end of 2026 is 13–19 percent (with a midpoint of 16 percent).

The report recorded an expectation of a 1.1 percent monthly price increase for November and 1.2 percent for December. It was stated that headline inflation is projected to reach 32 percent this year and 20 percent next year.

HSBC stated that the Central Bank maintains a more optimistic stance on the outlook than the markets. The report noted that in the market participants survey, the inflation expectation for 12 months ahead was set at 23.5 percent in November.

THREE FUNDAMENTAL ASSUMPTIONS SHARED

It was reported that HSBC's projections are based on three critical assumptions:

Minimum Wage: It is assumed that the minimum wage will increase by approximately 20 percent in 2026.

Exchange Rate: It is projected that the real effective exchange rate will remain largely flat throughout 2026.

Inflation Expectations: It is assumed that there will be no sudden and sharp shifts in inflation expectations.

The report stated that if these assumptions do not materialize, significant deviations could occur in inflation and the macroeconomic outlook.

In the HSBC analysis, it was emphasized that the greatest risk factor for 2026 is political uncertainty. It was noted that as the economic stability program enters its third year, its progress on track is viewed positively by the markets.

While drawing attention to the fact that price stability has not yet been fully achieved, it was stated that the economy is being managed with a "soft landing" scenario and that financial risks are being reduced.