All eyes on the critical report: Millions of minimum wage earners, civil servants, and retirees await salary hike decisions

The Central Bank of the Republic of Turkey (CBRT) will share its third inflation report of the year with the public on August 14, 2025. This report will not only provide clues about the economic outlook but will also be decisive in shaping salary hikes for millions of workers, civil servants, and retirees.

Since inflation reports contain forward-looking economic assessments, they are also seen as an important indicator for the figures that will be brought to the table in collective bargaining agreements.

DEMANDS OF CIVIL SERVANTS AND RETIREES

Collective bargaining negotiations for civil servants and civil servant retirees are ongoing. While the civil servant sector has put a demand for an 88 percent raise on the table, no official offer has yet come from the government side. Economists state that the inflation expectations to be announced by the Central Bank will play a critical role in meeting these demands.

PREVIOUS FORECASTS AND EXPECTATIONS

The year-end inflation forecast announced by the CBRT in May was 24 percent. For 2026, this rate was projected at 12 percent, and for 2027, at 8 percent. It is evaluated that there may be a slight decrease in these rates in the new report due to the effect of interest rate cuts.

HOW WILL THE 2026 RAISE BE SHAPED?

Civil servants and civil servant retirees received a 6 percent raise in the first 6 months and a 5 percent raise in the second 6 months within the scope of the collective bargaining agreement signed for 2025. A similar formula is expected for 2026.

According to forecasts, a raise offer of 6 percent for the first half of 2026 and 6 percent for the second half may be brought to the table. This increase will cumulatively reach 12.36 percent. Moreover, an inflation difference will be added to these rates, and an additional raise will be made according to the realized inflation difference.

SITUATION REGARDING MINIMUM WAGE

Credit rating agency Moody's pointed out in its latest report on Turkey that salary increases should be made according to "forward-looking expectations" rather than "backward-looking" ones.

According to the forecasts announced by the Central Bank in May, year-end inflation was projected at 24 percent, 12 percent for 2026, and 8 percent for 2027. If there is a decrease in the rates in the new report, it is considered highly likely that the minimum wage hike will also be shaped in line with these updated forecasts.