Levent Gürses
It was a week of significant developments. The Central Bank drew attention to both the interest rate cut and inflation. The US Federal Reserve also cut interest rates. Gold prices rose, the dollar fell. Silver broke records. However, another issue came to the fore: the rise in income inequality.
Unfortunately, the income inequality data did not receive much media attention. The interest rate-inflation debate took centre stage. Yet wealth and income inequality have become the country’s most pressing issue. Some media outlets found the ‘lipstick effect’ section of former Undersecretary of the Treasury and economist Dr Mahfi Eğilmez’s article titled ‘Where Has the Middle Class Gone?’ more interesting and quoted it. Thus, they preferred to present the huge income inequality through the lipstick effect.
Turkey is experiencing one of the biggest distribution shocks in its history
Economist İnan Mutlu shared a graph on social media, stating, “Turkey is experiencing one of the biggest distribution shocks in its history. The richest 10% own 75.6% of the wealth. The AKP, hand in hand with neoliberalism, has created a society where wealth and income inequality have peaked; the privileged rich and subjects working to feed themselves…”
The graph shows that the wealth share of the richest 10% in Turkey rose from 62% in 2007 to 70% in 2022 and 75.6% in 2023.
The share of wealth held by the richest 10% of the population in Turkey (%)
2007: 62.2
2008: 63.5
2009: 64
2010: 64.5
2011: 65
2012: 65.5
2013: 66.5
2014: 66%
2015: 65%
2016: 66%
2017: 68%
2018: 67%
2019: 66%
2020: 64%
2021: 65%
2022: 70%
2023: 75.6%
Source: World Inequality Database.
“The price of turning away from education and science is so high.”
The comments on İnan Mutlu’s post were quite interesting. Some of them were as follows:
They succeeded by impoverishing the educated class. What will be the consequences?
1-Science and technology production will slow down.
2-Economic development will become more difficult.
3-A society vulnerable to misinformation emerges.
4-The quality of decision-making mechanisms declines.
5-The culture of accountability diminishes.
6-Morality collapses.
Wealth transfer. Those who think this situation, which has been ongoing for about 9-10 years, emerged after the COVID pandemic are mistaken. If one side becomes rich, that money does not come from trees. Ultimately, it means that money is taken from one person’s pocket and put into another’s.
The imbalance in income distribution is clearly visible in this table. Why? The price of moving away from education and science is this heavy.
The result is the collapse of the family institution and the darkening of the country’s future as a result of the decline in population growth.
If it advances another 10 points, it will be exactly like the Indian caste system.
A ‘wealth tax’ should be introduced to reduce ‘income inequality’ at least to some extent…
I have spoken with talented, educated workers who have toiled for years under a system of slavery. I observed that they were all quite content with their servitude. I presented some with opportunities on a platter, yet they still chose to retreat to their comfort zones. Therefore, the statistics hold no meaning.
Since their arrival, they have become the focus of unjust acquisitions through wealth transfers.
How much tax have these new rich paid?
Has this ever been questioned?
The interesting thing is that they have always received their votes from this 90 per cent segment and continue to do so.
Prof. Dr. Baki Demirel also wrote:
“Although some liberal fools tell success stories, the country’s most important problem is wealth and income inequality. An economic policy that increases income and wealth inequality in the country does not reduce macroeconomic instability; it increases it. Our country needs to break the cycle of poverty.”
The World Inequality Report 2026 has been published
Following İnan Mutlu’s post, the World Inequality Report 2026, prepared by a team including renowned economist Thomas Piketty, was published with updated data. According to this, as of 2024, the wealthiest 10 per cent in Turkey hold 68.4 per cent of the wealth and 53.3 per cent of the income.
The bottom 50 per cent, however, only receive 2.7 per cent of wealth and 15.2 per cent of income.
The wealthiest 1 per cent own 35.1 per cent of all wealth and 21.2 per cent of income.
Looking at countries around the world, the countries where the richest 10% receive a higher share of wealth than in Turkey are: South Africa 85.6%, Russia 74.6%, Colombia 70.9%, Mexico 70.6%, Brazil 70.1%, the United States 69.6% and Chile 69.4%.
“The entire society is experiencing one of the greatest distribution shocks in the country’s history.”
Academic Fatih Yaşlı, in his article on sol.org.tr, states, “Over the last fifteen years, the “ratio of average employer income to average wage income” has doubled; that is, the share of wealth produced that goes to employers has doubled. The richest 10% own 75.6% of the total wealth; the remaining 24.4% is shared by 90% of the population.
We are not experiencing all this because of the government’s incompetence or ineptitude; behind what we are experiencing is a programme that makes the rich richer and the poor poorer.
Nothing has changed in the 2026 budget; this budget is also the budget of Turkey’s system. What we are experiencing now, namely expanding misery, deepening poverty, and intensifying decay, is related to Turkey’s system, is entirely political, and is our fundamental truth. The political can only be addressed politically, that is, through politics.”
Mahfi Eğilmez explained the decline of the middle class with the “lipstick effect”
In his article on the current state of the Turkish economy, economist Mahfi Eğilmez explained changing consumption habits and the ‘lipstick effect’ that emerges during times of crisis. In his article titled ‘Where Has the Middle Class Gone?’, Eğilmez drew attention to the ‘lipstick effect’ theory that emerges during times of crisis. According to this theory, consumers who have given up on major purchases (such as houses and cars) turn to relatively small but seemingly luxurious purchases (branded cosmetics, expensive coffee, etc.) to feel as if they are not in a crisis.
Eğilmez explained another reason for consumers’ luxury spending on credit with Alain de Botton’s ‘Status Anxiety’ and Veblen’s ‘Conspicuous Consumption’ theories, stating that the fear of not being respected in society and of being labelled a failure pushes people down this path.
Eğilmez summarised the situation as follows:
‘People who see that they cannot afford to buy increasingly expensive and increasingly difficult-to-access housing or cars are abandoning saving and spending the money they have under the influence of these three factors. They even resort to borrowing and using credit for this purpose. That is why restaurants and cafes are full, and expensive mobile phones are selling out.’
Eğilmez pointed to the collapse of Turkey’s socio-economic structure: ‘We were mistaken when we said the middle class had disappeared. The middle class is not disappearing; it is falling into a lower class, while the upper-middle class is now forming the new middle class.’
The regional face of inequality: Half of total income concentrated in 5 provinces
The Turkish Statistical Institute (TÜİK) has released its Gross Domestic Product (GDP) data by province. The data once again highlights the inequality in the country. The five provinces with the largest share of GDP, led by Istanbul, accounted for 53 per cent of total GDP.
According to current price calculations of Gross Domestic Product (GDP) at the provincial level, Istanbul achieved the highest GDP in 2024 with 13 trillion 10 billion 693 million TL, accounting for 29.2% of total GDP. Istanbul was followed by Ankara with 4 trillion 672 billion 844 million TL and a 10.5% share, and Izmir with 2 trillion 562 billion 758 million TL and a 5.7% share. In terms of provincial GDP, Gümüşhane ranked last with 41 billion 875 million TL, followed by Ardahan with 35 billion 502 million TL and Bayburt with 28 billion 137 million TL.
The top five provinces with the highest share of GDP accounted for 53% of total GDP in 2024. These provinces were Istanbul, Ankara, Izmir, Kocaeli and Bursa, respectively.
Per capita GDP in Istanbul: 802,669 TL
In terms of per capita GDP in 2024, Istanbul ranked first with 802,669 TL. Istanbul was followed by Kocaeli with 788,873 TL and Ankara with 788,859 TL. In terms of GDP per capita at the provincial level, Van ranked last with 203,049 TL, followed by Ağrı with 194,660 TL and Şanlıurfa with 188,144 TL. In 2024, GDP per capita exceeded the Turkish average in eleven provinces.
“Pensioner poverty, youth unemployment; we are far behind the EU in terms of the welfare state”
The CHP’s Urban Poverty Meeting in Tuzla highlighted criticism of the welfare state and the current poverty situation. Speaking at the Urban Poverty Meetings organised by the CHP Istanbul Provincial Directorate’s Social Policies and Urban Poverty Commission, sociologist Özlem Yalçınkaya Akdağ said, “Deep poverty, peer bullying, youth unemployment. In fact, this means a regime of total social insecurity. Peer bullying should not be seen as just a quarrel between children, a kind of war between them. Because children learn the early school of violence in peer bullying. If there is economic violence in a country, in a society, if there is social violence, unfortunately, children are the first mirror of it.”
Akdağ said, “The strongest social welfare states are in the European Union and the Scandinavian countries. Social protection expenditure in the European Union accounts for 27 per cent of GDP, while in Turkey it is only 10.8 per cent. In other words, we are well below the European average. Social cash transfers, excluding pensions, are 1.4 in Turkey, while the OECD average is 5.6. Even if we include pensions, unfortunately, this will not change much because there is pensioner poverty in our country. In other words, Turkey currently claims that it has a welfare state, but in reality, it does not use the resources of women, children, young people, pensioners, and the poor, but rather those who have money in the market,” he said.
Foggo: Poverty is a violation of human rights
Activist Hacer Foggo, who is prominent for her work against poverty, made a strong statement on social media. Foggo wrote:
“If 1,470,694 children are dropping out of school for economic reasons, if the child labour rate has risen from 16.2 per cent to 25 per cent in five years, 1,750,900 elderly people are living alone while there are only 168 nursing homes, and the average rent for a two-bedroom flat is £20,000 while the minimum wage is £22,000, then poverty is a human rights violation.”
Other important developments of the week are as follows:
The Central Bank cut interest rates by 150 basis points and emphasised inflation
The Central Bank cut its policy rate by 150 basis points last week. This brought the rate down from 39.5 per cent to 38 per cent. The CBRT has now cut interest rates for the fourth consecutive time.
The Board also lowered the Central Bank’s overnight lending rate from 42.5 per cent to 41 per cent and the overnight borrowing rate from 38 per cent to 36.5 per cent.
The Central Bank stated in its announcement, “In November, consumer inflation was lower than expected due to developments in food prices. The main trend in inflation declined somewhat in October and November after the increase in September. Quarterly growth in the third quarter was higher than expected. Leading indicators for the final quarter point to continued support for the disinflation process from demand conditions. While inflation expectations and pricing behaviour show signs of improvement, they continue to pose a risk to the disinflation process.”
“Price stability and the 5 per cent inflation target”
‘The tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through the demand, exchange rate and expectation channels,’ the statement said, adding: “The Committee will determine the steps to be taken regarding the policy interest rate in a manner consistent with the intermediate targets, taking into account inflation outcomes, the main trend and expectations, and ensuring the tightness required for disinflation. The magnitude of the steps is being reviewed with an inflation outlook-focused, meeting-based and cautious approach. Should the inflation outlook deviate significantly from the intermediate targets, the monetary policy stance will be tightened.”
How did economists interpret this?
Economists said the interest rate decision was taken ‘reluctantly’.
Prof. Dr Hayri Kozanoğlu shared the following: “CBRT: What could we do? When the Turkish Statistical Institute announced very low inflation in November, we were forced to cut the interest rate by 150 basis points! Frankly, we were not keen on such a cut!”
Economist Mustafa Sönmez commented: “The 150 basis point cut seems to have been made under pressure from certain quarters, despite the looming threat of inflation ending the year at 33%.”
Uğur Gürses noted: “The Central Bank has noted that expectations and pricing behaviour continue to be a risk factor. It could have shown caution by being more frugal with the cut and going for 16%. They probably thought, “we have room to manoeuvre”.‘
Prof. Dr Hakan Kara: ’What producers need is not artificially lowered interest rates, but first and foremost an increase in confidence and predictability to create the right conditions for a substantial interest rate cut.”
Banu Kıvcı Tokalı: ‘We can say that the policy approach of maintaining an inflation-compatible reduction process and increasing support through the expectation channel has been preserved. I maintain my policy interest rate forecast of 27.5 per cent for the end of 2026.’
Orkun Gödek: Drawing attention to the inconsistencies in the decision text, he said, “This paragraph is inconsistent within itself. Taking a 150bp step with growth thought to be stronger than expected, and a decline due to food prices is not consistent. We have started to push.‘
Prof. Dr Serap Durusoy: “With inflation data creating room for interest rate cuts, the CBRT implemented a 150 basis point interest rate cut. How is it a contradiction to talk about risk factors in terms of the disinflation process and then proceed with an interest rate cut? Although expectations and pricing behaviour show signs of improvement, it is valued as a risk factor for disinflation, but interest rates are still being cut.”
Prof. Dr Utku Altunöz: “There is a concept in economics known as the impossible trinity. It is a rule in international economics and international political economy that states that a fixed exchange rate, free capital movement and an independent monetary policy cannot be pursued simultaneously. The only person in history to break this rule was an economics professor (!) Tansu Çiller… The same applies to the Central Bank of the Republic of Turkey (CBRT). Claiming to both cut interest rates and implement a tight monetary policy…‘
TİM President Mustafa Gültepe: “The direction is right, but costs are still very high. The Central Bank’s decision to lower the policy interest rate from 39.5% to 38% shows that the cycle of interest rate cuts is continuing. The reduction rate is not sufficient for us as producer-exporters. However, we want to evaluate this decision as a symbolic but directional first step taken before 2026.”
“We hope that banks will also put their money where their mouth is.”
Gürsel Baran, Chairman of the ATO Board of Directors: The decision is a positive development in terms of trade, investment and production. Following this step, we hope that banks will also do their part and reflect the interest rate cut in the credit market, contributing to easier access to finance for our businesses.
Foreign financial institutions’ 2026 forecasts…
Following the interest rate cut, experts from foreign financial institutions made their 2026 forecasts regarding the dollar, inflation and the minimum wage. The Ekonomim newspaper reported on the matter as follows:
ING Global’s report emphasised that November inflation showed a stronger-than-expected slowdown on the headline, thanks to a downward surprise in food prices and base effects, but that the underlying trend in core and service inflation remained high, noting that this outlook was one of the factors encouraging a larger cut in December. It was stated that future steps would be data-driven, and that the 2026 minimum wage negotiations, automatic tax adjustments, dollarisation trends and reserve developments would be decisive for the outlook.
Deutsche Bank reported that the carry trade is currently prominent in Turkey, but as the year progresses, the risk-return balance is becoming less favourable, particularly due to the decline in carry and the sticky trend of inflation. The bank, which reported that the dollar/TL would rise to 43 at the end of 2025, forecast 52 TL for 2026 and 62 TL for 2027.
JP Morgan’s report emphasised that the economic outlook would gradually improve in 2026, but household fragility would persist. Nevertheless, the recovery in profitability would strengthen, supported by more reasonable cost inflation and positive base effects. JPMorgan’s macro team maintained its 4.4 per cent growth forecast for the Turkish economy in 2026, predicting that the pace of growth would increase, particularly in the second half of the year. It also stated that inflation was expected to decline gradually, albeit slowly.
According to the report, Turkish consumer companies are poised for recovery in 2026 after a challenging 2025. The decline in inflation, wage increases and more stable consumer demand will support the sector’s return to a growth path.
The bank, which accurately predicted the minimum wage in 2025, announced that it expects a 25 per cent increase in the minimum wage in the new year. According to this prediction, the current minimum wage of 22,104 Turkish lira will rise to 27,630 Turkish lira.
“This will pose a challenge to the perceived credibility of the Central Bank”
Oxford Economics commented on the interest rate cut, stating, ‘Given the increase in medium-term inflation expectations, we expected the central bank to act cautiously and avoid a larger interest rate cut,’ while Monex Europe also noted that with the easing of inflation, “This carries the risk of appearing overly dovish; if this trend continues until 2026, it will pose a challenge to the Central Bank’s perceived credibility.”
Hakan Aksoy, Senior Fund Manager for Emerging Markets at Amundi, Europe’s largest fund, stated that they expect the minimum wage increase to be below 25 per cent, adding that if the minimum wage increase is around 23 per cent, the interest rate cut could fall from 38 percent to 29 percent.
Hakan Aksoy said, ‘We prefer 2-5 year TL bonds,” adding that they do not expect inflation to fall below 20 percent in 2026, that their base scenario is around 23 percent, and that they have adjusted their portfolios accordingly in case of a downward movement in inflation. Aksoy said that in 2026, “If it continues to lose 1 per cent in value every month, it is possible to say that the exchange rate will be 52,” adding, “If the balance of payments looks worse, it could be 55.” He listed his 2026 forecasts as follows: We expect the weak dollar policy to continue, which will have a positive impact on emerging markets. We expect the ECB to make two interest rate cuts, pushing the exchange rate above 1.20. The BoJ will make two more interest rate hikes, and we do not expect the yen to depreciate excessively beyond these levels. Barring any major geopolitical risks, I expect performance on the duration side. I believe the carry trade will become more dominant globally. Our outlook for the first half is positive.”
Nomura Senior Turkey Economist Zümrüt İmamoğlu stated, ‘The Central Bank cut rates by 150 basis points to maintain the same level of tightness with headline inflation,’ adding, ‘We view the CBRT’s decisions as neutral.’ Imamoğlu said, “There has been a change in the Turkish Statistical Institute’s methodology, making it difficult to predict, but we currently expect January inflation to be 3.5 percent. We expect a flatter trajectory in February. We expect the CBRT to update its inflation forecast, which it has stated as 16 per cent for next year. The CBRT will likely wait until May for the forecast revision. A revision to inflation in the February report is too early. Nomura’s expectations for 2026 are 21-22 percent inflation and 28 percent interest rates.
If the CBRT wants to reach its target, it must maintain a tight stance in 2026. There could be an 8-10 point interest rate cut space in 2026. Our inflation forecast is 21 percent, so a 16 percent inflation expectation seems a bit ambitious. A 10 percent increase in the minimum wage affects inflation by 1-1.5 points.
Barring any unexpected developments, our exchange rate forecast for the end of 2026 is 51, and as long as this holds, dollarisation is not a threat. If positive inflation figures come in January and February, foreign investors may show interest in bonds. Turkey is in a positive position in terms of borrowing, with no foreign currency borrowing issues.
We expect the current account deficit to be around 1.3 percent next year, rising to 1.6 percent, but a deficit below 2 per cent is not a problem for Turkey. The 2026 agenda looks ambitious; if inflation comes in as expected, a rating upgrade could be seen towards the end of the year. We have raised our 2026 growth forecast from 3.2 percent to 3.5 percent.
The Fed cut interest rates by 25 basis points despite two dissenting votes
The US Federal Reserve (Fed) cut its policy interest rate by 25 basis points to a range of 3.50-3.75. The two dissenting votes against the rate cut at the meeting raised the possibility that the Fed may halt further rate cuts going forward. The Fed also announced that it would begin purchasing US Treasury bonds on 12 December and would purchase $40 billion worth of Treasury bonds within 30 days.
Commenting after the interest rate decision, Fed Chairman Jerome Powell said that the policy interest rate was in a ‘neutral’ range and that it was appropriate to wait and see how economic data developed. Powell noted that inflation risks were on the upside, while employment risks were on the downside.
US Federal Reserve (Fed) Chairman Jerome Powell commented on the economy at a press conference following the decision to cut the policy interest rate to the 3.50-3.75 per cent range. Powell stated that they were engaged in a difficult balancing act between inflation and employment.
“Inflation is high, and employment risks have increased”
The Fed Chair stated that short-term inflation risks are still on the upside, but they expect the downward trend to resume once the impact of tariffs subsides. The situation is different on the employment front. Powell drew attention to the risks in the labour market, stating, ‘Downside risks to employment appear to have increased in recent months.’
Two-sided opposition to the interest rate decision
The Fed’s statement noted that Board Member Stephen Miran wanted a more aggressive 50 basis point cut, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid voted against the decision, favouring keeping rates steady.
The Fed’s policy statement said current indicators show economic activity is expanding at a moderate pace. The statement noted that employment growth has slowed this year and the unemployment rate rose slightly through September. With this decision, the Fed continued the interest rate reduction process it began in September last year after a four-year hiatus.
Fed impact: Sharp fluctuations in gold prices
Gold prices fluctuated after the Fed lowered its policy interest rate by 25 basis points, as expected, to a range of 3.5-3.75 per cent. Markets experienced volatility following the interest rate decision. The price of gold per ounce, which fell to $4,188 at the time of the decision, rose again to $4,238 with the start of Fed Chairman Jerome Powell’s remarks. Silver prices reached record levels due to increased demand in the artificial intelligence, data centres and electric vehicle sectors. Silver hit a historic high of $61.47 per ounce. Spot silver is trading at $61.17.
Gram gold, which gained value in line with the rise in the ounce price, rose to 5,793 Turkish lira. Quarter gold is selling for 9,544 Turkish lira, and republic gold for 38,032 Turkish lira.
2026 forecast from 7 major banks; gold could reach $5,000 per ounce
International banks’ 2026 forecasts for gold indicate that the trend will continue upwards next year. The figures presented by the banks that have updated their reports suggest that the bar has been set even higher. Bank of America and JPMorgan are among those with the highest forecasts, targeting $5,000. The banks’ gold price forecasts per ounce for 2026 are as follows:
Bank of America: $5,000
JPMorgan: $5,000
Goldman Sachs: $4,900
Wells Fargo: $4,500 – $4,700
Morgan Stanley: $4,500
UBS: $4,500
Deutsche Bank: $4,450x
Silver hits a historic high at $64
Silver broke records by rising above $60 per ounce for the first time in history following the Fed’s interest rate cut. On Thursday, 11 December, the price of silver exceeded $64 per ounce. Silver prices began to rise particularly after the Fed’s decision to cut interest rates. Silver gained 20 per cent in the last month and 8.5 per cent in the last week.
Three reasons behind the rapid rise in silver
Attention is drawn to three critical factors behind this rise in silver, which surpassed gold in profit with its record high. Silver has made its mark on 2025. While gold broke record after record, silver rose quietly.
The three reasons behind this rise are as follows: the US Federal Reserve’s interest rate decision, the supply gap in the technology sector, and the US’s possible customs tariffs…
It would be wrong to view silver solely as an investment vehicle. Its superior electrical conductivity compared to gold and copper makes it indispensable to industry. Increased production of electric vehicles (EVs), solar panels and new-generation batteries has pushed demand for silver above supply.
FT: If you don’t want to pay a heavy price, don’t do what Turkey did
The Financial Times (FT), one of the world’s leading economic newspapers, published a striking analysis examining the recent trajectory of Turkey’s economy and warned central banks by pointing to Turkey’s economy. The FT stated, “If you don’t want to pay a heavy price, don’t do this,” and wrote that Turkey paid a heavy price for its “low interest rate” insistence ahead of the 2023 elections.
The report highlighted the damage caused by the policies implemented by the government, particularly before the 2023 elections, which economists described as “irrational.” It emphasised that Turkey’s experience serves as a ‘warning sign’ for other countries’ central banks.
The analysis stated that despite Turkey’s potential, its balance had been disrupted by wrong decisions, noting:
‘For years, Turkey, with a population of around 85 million, has been a rising actor in the global economy. However, the unconventional monetary policy implemented in recent years distorted the traditional interest rate-inflation balance.’
The report recalled that in 2022, in particular, the CPI exceeded 85 per cent, far exceeding the European average, and stated that this situation had come back to haunt the country in the form of a ‘heavy bill’. Assessing the change in the CBRT’s management following the 2023 elections and the return to a ‘tight monetary policy’ under the leadership of Fatih Karahan, the newspaper wrote that despite inflation falling to 31%, the danger had not passed.
Warning to the world: Don’t make this mistake
The Financial Times presented the example of Turkey as a lesson in how ‘well-intentioned but misguided monetary policies can come at a heavy price’. The analysis emphasised how the spiral of low interest rates and high inflation eroded citizens’ purchasing power, conveying the message that ‘even with good intentions, deviating from traditional monetary policy is risky’. It stated that if developing countries make similar mistakes, their societies could face prolonged economic shocks.
“The economy is managed by data, not by desire”
The report noted that the Central Bank’s targets of 16 per cent and 9 per cent for 2026 and 2027 remain ‘controversial’ in light of current risks.
The analysis concluded by reminding that the process Turkey is going through is a lesson that ‘the economy should be managed based on data, not desire.’
Minimum wage meetings begin; few anticipate an increase above 25 per cent
The Minimum Wage Determination Commission held its critical meeting on Friday, 12 December. Following a series of meetings by the Commission, the final figure awaited by millions is expected to be determined.
Prior to the negotiations, the figures applied, which are insufficient in the face of the high cost of living, are as follows: While a worker’s gross monthly minimum wage is 26,005.50 Turkish Lira, after deductions, the worker receives a net amount of 22,104.67 Turkish Lira.
The total cost to the employer is 30,621 lira 48 kuruş. This cost consists of 26,005.50 TL gross wage, 4,095.87 TL social security contribution, and 520.11 TL employer unemployment insurance fund.
The 2026 pay rise rates discussed prior to the meeting and how these rates will be reflected in salaries are calculated as follows:
25% Pay Rise: Net minimum wage 27,630 lira.
27% Pay Rise: Net minimum wage 28,072 lira.
29% Increase: Net minimum wage 28,515 lira.
31% Increase: Net minimum wage 28,957 lira.
32% Increase: Net minimum wage 29,178 lira.
33% Increase: Net minimum wage 29,399 lira.
“A maximum of 25 per cent, anything more would be a surprise”
SGK expert Özgür Erdursun, citing the government’s tight monetary policy as grounds for suppressing wages, expressed his expectation with the words, ‘A maximum of 25 per cent. Anything more would be a surprise.’ The picture painted by Erdursun points to a bleak future for workers.
It is stated that the poverty line, currently at 30,000 TL, could jump to the 35–40,000 TL range by the end of 2026.
In this scenario, if the minimum wage is increased by 25 per cent, salaries will remain at 27,630 TL.
Prof. Dr. Aziz Çelik: Two criteria should be considered
Prof. Dr. Aziz Çelik stated that discussions about structural changes in the Minimum Wage Determination Commission would not solve the problem, emphasising that the minimum wage should be determined based on rules and living conditions. Çelik pointed out that ‘living conditions and economic growth data’ should be the basis for determining the minimum wage.
President Erdoğan: “There is no pocket in a shroud; employers should put their hands in their pockets for the minimum wage”
President Recep Tayyip Erdoğan said, ‘I expect TİSK, which represents employers on the Commission, to put their hands under the stone. Every positive step you take towards our worker brothers will return as productivity, profit and prosperity. I always say: There are no pockets in a shroud.’
Revenues from alcohol and gambling to soar in 2026
CHP Niğde MP Ömer Fethi Gürer stated that tax revenues from alcoholic beverages and gambling showed an extraordinary increase compared to 2021 and announced that total revenues are expected to reach 258.7 billion lira in 2026. Gürer emphasised that it is a serious contradiction that the government is achieving its largest revenue increase from these items, despite its ‘conservative rhetoric criticising alcohol and gambling.’
Taxes on alcoholic beverages were 22.9 billion lira in 2021, while the planned revenue for 2026 is rising to 191.6 billion lira. This represents an increase of 8.4 times (735 per cent). He stated, ‘It is thought-provoking that a government that defines itself as conservative is achieving its largest revenue increase from alcohol and gambling.’
The bitter pill was prescribed by the pro-government media
According to TÜİK data, inflation in the second half of the year was 2.06 per cent in July, 2.04 per cent in August, 3.23 per cent in September, 2.55 per cent in October and finally 0.87 per cent in November.
The Sabah newspaper, known for its proximity to the government, published a noteworthy analysis on pension and civil servant pay rises. In this scenario, inflation in the second half of the year is calculated at 12.28%. Accordingly, SSK and BAĞ-KUR pensioners will only receive a 12.28% pay rise. For civil servants and civil servant pensioners, the total increase will remain at 18.7 per cent, including a 6.93 per cent inflation difference and an 11 per cent collective agreement increase. The lowest SSK and BAĞ-KUR pension, currently 16,881 TL, does not even exceed the 19,000 TL threshold according to the scenarios on the table; in the 12.49 per cent scenario: The lowest pension is 18,989 TL.
According to calculations, the current minimum civil servant pension of 22,672 TL will increase to 26,911 TL with an 18.7% increase. When the 1,000 TL lump sum increase is added, this figure will only reach 27,911 TL.
For active civil servants, the minimum salary of 50,503 TL is expected to rise to 60,947 TL in the new year. The salary of a university graduate civil servant will reach 63,456 TL.
Good times are not ahead for those dreaming of retirement
With the new regulation, purchasing days will become more expensive after January 2026. The “Omnibus Bill”, expected to come into force in the new year, will further burden the millions already struggling under inflation. The bill, which includes fundamental changes in many areas from social security to taxation, will directly affect those counting down the days to retirement and those who will take out loans.
Rates for military service and overseas borrowing are increasing, and the deadline for “cheap retirement” is the end of December. The new omnibus bill introduces innovations that will profoundly affect the economy of millions, particularly social security legislation. The regulation, which will completely overhaul retirement accounts, covers a wide range of people, including employees awaiting retirement, homeowners, and those buying and selling vehicles.
Privatisation resulted in a loss of 2.9 billion TL for TEDAŞ
The complete transfer of electricity distribution to the private sector in 2013 brought with it exorbitant price increases. The privatisation of electricity distribution, under the claim that it would bring ‘quality, competition and affordability’, also imposed heavy burdens on the public. TEDAŞ’s period loss, unable to collect its receivables from electricity distribution companies, reached 2.9 billion TL.
According to a report by Mustafa Bildircin in Birgün, the majority of receivables arising before the privatisation of the electricity distribution business and remaining with TEDAŞ during the privatisation of distribution companies have still not been collected despite the passage of 12 years. The financial structure of TEDAŞ, established in 1970 to eliminate the fragmented structure in the electricity sector, has been irreversibly damaged due to the AKP’s privatisation policy in the energy sector. The institution’s period loss reached 10-digit amounts at the end of 2024.
Although the institution managed to stabilise its financial situation in 2022 and 2023 with funds transferred from the Treasury, 2024 was a ‘disastrous year’ for TEDAŞ. According to data from the Treasury and Ministry of Finance, TEDAŞ’s period loss skyrocketed to 2 billion 916 million TL as of 2025. The institution’s total operating loss was recorded as 4 billion 207 million TL.
“Turkey is buying back 12 times what it sells to China”
During the 2026 Central Trade Ministry Budget discussions, CHP İzmir MP Seda Kâya Ösen claimed that Turkey faces a serious risk of deindustrialisation, stating, “Our foreign trade with China, in particular, is seriously unbalanced. Turkey imports 11–12 times what it exports to China.”
Ösen said, “We cannot produce in critical sectors, we cannot create added value. Because the government cannot implement policies that will direct investors to the right areas and support real production. Over the last 20 years, the share of high-tech products in total exports has been stuck between 3 and 5 per cent. Developments in the defence industry are important, but they are not enough to boost high-tech exports. Turkey still exports predominantly low-tech products. Over the past 20 years, the share of low-tech exports has remained between 65% and 59%.”
University graduate unemployment exceeds overall unemployment
According to OECD data, Turkey was the only country where the unemployment rate among university graduates exceeded the general unemployment rate. The data indicate that the link between diplomas and employment is weakening and that the alignment between higher education and employment needs to be reconsidered. According to a report in Ekonomim, the OECD’s 2024 employment statistics have brought the issue of the value of higher education in the Turkish labour market back to the fore. According to comparative graphs published by the organisation, while higher education is a factor that increases the likelihood of employment in other OECD countries, the picture in Turkey is the opposite. The data indicate that the link between diplomas and employment is weakening and that the alignment between higher education and employment needs to be reconsidered.
According to the data, the number of universities and academics in Turkey is not high compared to other countries; the real problem is that the number of academics per student is very low. Errors in faculty and vocational school planning, along with excessive orientation towards open education and low-scoring departments, are cited as the source of the problem.
Central Bank reserves increase with gold support
The Central Bank’s total reserves recorded a 1.7 per cent increase this week, reaching 186.4 billion. In the week of 5 December, the bank’s total reserves jumped by $3.2 billion to $186.4 billion. This increase in official reserve assets was recorded at 1.7 per cent compared to the previous week.
An examination of the reserve sub-items revealed increases in both foreign exchange and gold. Foreign exchange assets rose by 1.7 per cent compared to the previous week, reaching $69 billion. Gold assets recorded an increase, as in other weeks. Gold-denominated reserve assets gained 1.9 per cent in value, reaching $109.7 billion. The IMF reserve position and SDR total also saw a limited increase (0.4 per cent) to 7.7 billion dollars.
Swap data, which is closely followed by the markets, has also been announced. As of this week, the Central Bank’s foreign currency liabilities arising from total foreign currency swap transactions were calculated at 17.6 billion dollars.
Global debt rises to $346 trillion
The Institute of International Finance (IIF) published its ‘Global Debt Monitor’ report under the title ‘A new wave of debt accumulation is approaching – Could it be different this time?’ According to the report, total global debt increased by more than $26.4 trillion in the first three quarters of the year. Total debt reached a new peak of approximately $346 trillion in the third quarter. Global debt stood at $327.5 trillion in the same period last year. The ratio of total debt to global Gross Domestic Product (GDP) reached 310 per cent during this period. While the increase in debt continued to be concentrated in the US and China, the total debt of developed economies was calculated at $230.6 trillion in the third quarter of the year, while total debt in developing countries reached $115.1 trillion. Significant increases in debt were also recorded in France, Germany and the UK, as well as the US. In developing countries, the largest increases in debt after China were seen in Brazil, Russia, Korea, Poland and Mexico.
Looking at the distribution of global debt, household debt rose to $64 trillion in the third quarter of this year, non-financial corporate debt to $99.3 trillion, public debt to $105.8 trillion, and debt owed to financial companies such as banks to $76.6 trillion.
One-third of companies listed on the stock exchange have gone public in the last six years
Ömer Gönül, Chairman of the Capital Markets Board (CMB), stated that 204 companies have been publicly listed since 2020 and that these companies have raised 222 billion lira from the market, adding, “Currently, one-third of the companies traded on the stock exchange have been publicly listed in the last six years, and the number of companies traded on the stock exchange has reached 590.” Korkmaz Ergun, General Manager of Borsa Istanbul AŞ, said, “Our average daily trading volume has risen from 25 billion lira to 200 billion lira.” Gönül noted that the number of investors has exceeded 6.4 million and emphasised that the number of investors with balances in the capital markets is approaching 11 million.
The number of millionaires on the stock exchange has increased
According to information compiled from Central Registry Agency (MKK) data, the total number of investors in shares on the Istanbul Stock Exchange fell by 6.4 per cent compared to the end of last year, to 6,431,980 at the end of November.
During this period, the total portfolio value of investors rose from 5 trillion 711 billion 806 million lira to 7 trillion 283 billion 680 million lira.
The number of ‘millionaire’ investors rose by 23.2 per cent to 295,343 as of November, compared to 239,742 at the end of last year. Thus, 55,601 new ‘millionaire’ investors were added to the Istanbul Stock Exchange. During the same period, the total portfolio size managed by these investors also increased from 5 trillion 263 billion 224 million lira to 6 trillion 852 billion 788 million lira. As of November, this group, which constitutes 4.6 per cent of the total number of equity investors, holds 94.1 per cent of the total equity market worth 7 trillion 283 billion 680 million lira with their investments.
100 billion dollar trade target with the US
During Trade Minister Ömer Bolat’s visit to the US, where he will hold a series of high-level meetings in Washington, concrete steps to be taken to achieve the $100 billion trade volume target will be discussed. Bolat will meet with US Trade Representative Jamieson Greer and US Secretary of Commerce Howard Lutnick. This target was set during President Recep Tayyip Erdoğan’s visit to the US.
Shopping centres have reached a point where they can no longer survive
The ‘shopping centre craze’ that marked an era has come to a halt. Nuri Şapkacı, President of the Shopping Centres and Investors Association (AYD), announced that shopping centres in Turkey, which number 450, are no longer able to bear the burden of growth.
Şapkacı highlighted the bottleneck the sector has fallen into, emphasising that, excluding projects that began before the pandemic, not a single new nail has been hammered in. According to data shared by Şapkacı, while official inflation exceeded 32 per cent in the first 10 months of this year, the square metre efficiency of shopping centres remained at 29 per cent. In other words, the sector has shrunk in real terms. Worse still, the number of people visiting shopping centres has decreased by 3.4 per cent.
Greek Titan acquires Turkish cement company for $190 million
Greece-based cement producer Titan has agreed to acquire Traçim Çimento in its entirety for approximately $190 million. The Traçim factory has a cement production capacity of approximately 2.5 million tonnes.
Warning from an economist who predicted the 2008 crisis: ‘OpenAI will soon explode’
Michael Burry, the legendary investor who became famous for predicting the 2008 global economic crisis and whose story was adapted into the film The Big Short, argued that a major problem period is approaching in the field of artificial intelligence, stating that “OpenAI will soon explode.”
The largest IPO in history: SpaceX
Elon Musk’s space company SpaceX is planning an IPO. According to Bloomberg, the IPO is expected to take place between mid-2026 and late 2026. SpaceX is reported to be aiming for a valuation of $1.5 trillion and to raise $30 billion from the stock market. This would surpass Saudi Aramco’s IPO in 2019, which raised $29 billion, making it the largest IPO in history.
The Wall Street Journal previously revealed that SpaceX had conducted a secondary share sale for its employees, which could have led to the company’s current valuation reaching approximately $800 billion. Bloomberg, meanwhile, states that SpaceX has ‘confirmed’ this share sale in recent days and that the company is valued at over $800 billion.
US trade deficit hits five-year low
The US trade deficit fell by 10.9 per cent in September to $52.8 billion, reaching its lowest level since June 2020. According to data released by the US Department of Commerce, the trade deficit narrowed significantly in September compared to the previous month. Market expectations were for the deficit to reach $62.5 billion.
The goods trade deficit with China, one of the US’s major trading partners, decreased by $4 billion compared to the previous month, falling to $11.4 billion in September.