President Recep Tayyip Erdoğan acknowledged on Tuesday that inflation in Türkiye remains above targeted levels but reaffirmed the government's commitment to its medium-term economic road map.
Erdoğan emphasized that the government would not overlook the hardships faced by fixed-income groups, who are most affected by high costs of living.
His remarks came as negotiations on a minimum wage hike for 2025 began on Tuesday. The increase also serves as a reference for broader salary agreements in the economy. Erdoğan holds the final decision.
"Fixed-income earners are the most negatively impacted by economic challenges. We will not remain indifferent to their struggles ... We will implement policies aimed at reversing the deterioration in income distribution," Erdoğan told a Justice and Development (AK) Party gathering in the capital Ankara.
The president has repeatedly pledged to safeguard workers' purchasing power and last month said minimum wage increases would continue to outpace inflation next year.
Vice President Cevdet Yılmaz late Monday said the government's approach to the wage negotiations would balance workers' demands with broader economic realities.
"Our most pressing and fundamental issue today is inflation and achieving price stability. We are continuing our fight against inflation through comprehensive policies," said Yılmaz.
The general market consensus is that the wage hike will be around 25%, but there are expectations for a bigger increase. The adjustment will affect approximately 9 million workers.
In his opening remarks, Labor and Social Security Minister Vedat Işıkhan said the minimum wage meeting would focus on hearing the perspectives of both worker and employer representatives.
Işıkhan emphasized that the desired minimum wage figure should "enhance workers' welfare," "preserve employers' competitiveness," and "strengthen the nation's economic stability and social development."
The Minimum Wage Determination Commission consists of 15 members, with five representatives each from workers, employers, and the government.
The union leader representing workers in the talks criticized those pushing for a restrained hike by highlighting the difficulties faced by those living on a minimum wage.
Annual inflation stood at 47.09% in November, higher than anticipated, potentially diminishing the likelihood of an interest rate cut by the central bank this month.
Inflation has eased from 48.6% in October, moving further away from its peak of 75.45% in May.
The minimum wage was increased by 107% in 2023 when the year-end inflation rate stood at 65%. It was raised by 49% this year, five percentage points above the central bank's final inflation projection.
For the past 18 months, authorities have adopted more conventional economic policies, implementing interest rate hikes and other measures to tame inflation.
Since June last year, the Central Bank of the Republic of Türkiye (CBRT) has raised its benchmark policy rate by 4,150 basis points and kept it at 50% since March.
The central bank sees year-end inflation at 44% and expects it to fall to 21% in 2025. The government forecasted end-2024 and end-2025 inflation rates at 41.5% and 17.5%, respectively. However, Treasury and Finance Minister Şimşek recently stated that the year-end figure is expected to exceed these forecasts, likely reaching around 44%-45%.
CBRT Governor Fatih Karahan said on Monday that the process of disinflation was continuing and that the bank's tight monetary policy stance had positively impacted reserves.
Karahan also said the slowdown in the underlying inflation trend was continuing.
Erdoğan on Tuesday stressed the importance of curbing excessive price increases and hinted at stricter measures to deter profiteering.
"Although inflation has not yet reached our desired level, we are steadfast in pursuing this direction."
