TÜİK announces 6-month inflation at 24.7 pct, pension hike set at same rate

The government-run TÜİK reported six-month inflation at 24.7 percent and annual inflation at 71.6 percent in June. As a result, pensions will increase at the same rate, and civil servants will receive a 19.3 percent raise.

Duvar English

The inflation increased by 1.64 percent from the previous month and 24.73 percent since December, according to the figures reported by the Turkish Statistical Institute (TÜİK) in their June Consumer Price Index (CPI) report.

The government-run institute stated that the annual inflation was 71.60 percent and the twelve-month increase was 65.07.

Annual rate of changes in CPI (%), obtained from the TÜİK's report.

The main group with the lowest increase compared to the same month of the previous year was clothing and footwear with 47.84 percent. On the other hand, the main group with the highest annual increase was education with 107.11 percent.

In June 2024, out of 143 basic headings in TÜİK's index, the index for 35 basic headings decreased, five remained unchanged, and 103 saw an increase.

Treasury and Finance Minister Mehmet Şimşek stated that the disinflation process has begun, emphasizing, "We will see significant progress in disinflation, which is the main goal of our program, alongside our achievements in financial stability, sustainable current account, reserve accumulation, and removal from the grey list."

Independent research group puts

According to the Inflation Research Group (ENAG), an independent group of academics and economists, inflation rose by 4.27 percent in June monthly and the 12-month increase was 113.08 percent.

ENAG reported a six-month inflation rate of 41.16 percent, almost double the figure provided by TÜİK..

Pensions increase by 24.7 pct

The interim salary increases to be received by civil servants and pensioners in Turkey are indexed to six-month inflation.

Thus pensioners will receive at least a 24.7 percent increase, the same rate with the 6-month inflation.

Public employees will both receive an inflation difference of 8.46 percent and a 10 percent increase from the collective bargaining agreement. 

There has been no official announcement yet regarding the adjustment of the minimum pension, which is currently set at 10,000 Turkish liras ($307), but an increase at least in line with the six-month inflation rate is expected.

If this scenario materializes, the minimum pension could be redefined to fall between 12,500 and 15,000 liras, pending parliamentary approval. 

The minimum civil servant pension would range from 14,740 liras to 17,590 liras, while the minimum civil servant salary would increase from 32,860 liras to 39,200 liras. For single civil servants, the salary would rise from 30,380 TL to 36,240 liras.

For instance, a public teacher's salary is expected to increase from approximately 39,800 liras to 47,450 liras, while a police officer's salary is set to rise from 44,000 liras to 52,500 liras.

The salaries of specialist doctors working in state hospitals can be increased from 55,500 liras to 66,000 liras.

The lira had initially dropped to record lows as investor confidence ebbed against the backdrop of inflation that hit its highest level since November 2022 in May as a result of unorthodox monetary policy.

As of July 3, the US Dollar to Turkish Lira exchange rate was at 32.69, slightly up from 32.68 the previous market day and significantly higher than 26.08 one year ago.

The rent hike cap increases to 65 percent

With the release of June inflation data, the maximum allowable rent increase for workplaces and residential properties in July was set at 65.07 percent.

The 25 percent rent increase cap, which began in June 2022, ended in July.

Asked whether the 25 percent cap on rents would continue, Şimşek has previously said, "I see no reason for the policy to continue."