ALBAWABA –The government raised the minimum wage in Turkey for the second time in 2023, Tuesday, this time by 34 percent, raising it by 107 percent in total from the end of last year, news agencies reported.
Although this move signals President Recep Tayyip Erdogan’s commitment to improving the economic conditions of low-income people, it could end up accelerating inflation, according to Bloomberg.
Inflation has slowed since last year, but still stands at 40 percent.
“If inflation does not slow down, the wage increase is meaningless,” said Ergun Atalay, head of Turkey’s Labor Unions Confederation, as reported by Bloomberg.
“We hope that the prices in the market will be taken under control as soon as possible.”
The monthly net minimum wage will be raised to 11,402 liras ($483), Labor Minister Vedat Isikhan said in televised comments.
To curb inflation, the central bank is holding its policy-setting meeting on Thursday and is expected to start ramping up its rate from the current 8.5 percent, according to Reuters.
Forecasts from a Bloomberg survey suggest the bank will hike the rate to anywhere between 14 and 40 percent, with the median estimate at 20 percent.
