49% ↑ compared to the minimum wage adjusted in the middle of this year
“Last month’s inflation was 62%… “It could have a more negative impact.”
The Turkiye government announced that it would increase the minimum wage by 49% next year. Although it takes into account the increase in living costs due to chronic inflation, it is pointed out that it may be more difficult to suppress inflation.
According to the British Financial Times (FT) on the 27th (local time), Labor Minister Bedat Ishkan Turkiye announced that the monthly minimum wage will be increased to 17,002 lira (about 750,000 won) starting next year. This is twice the increase rate at the beginning of this year, and is a 49% increase compared to the minimum wage adjusted in the middle of this year.
“I am pleased to once again deliver on our pledge to prevent workers from being crushed by inflation,” said Minister Ishikan. Approximately one-third of the total population of 86 million people in Turkye receive the minimum wage.
The currency crisis in Turkye at the end of 2021 triggered the worst inflation in 25 years, with the lira losing about 35% against the dollar this year. Food prices, utility bills, and rent are all said to be soaring, causing suffering to most Turkic households.
The FT reported that raising the minimum wage could further fuel inflation, which reached 62% last month. The central bank expected inflation to peak at 70% last May, but it may need to raise interest rates further, the FT added.
Previously, the central bank raised the benchmark interest rate by a total of 34 percentage points since last June after President Recep Tayyip Erdogan was re-elected and appointed a new governor. During his election campaign, Erdogan pushed his predecessor at the bank to cut interest rates to single digits to encourage economic expansion.
Meanwhile, Turkiye is facing local elections on March 31 next year. President Erdogan won re-election earlier this year and pledged to take back Istanbul, the largest city, and Ankara, the capital, from the opposition, building on the momentum that marked his 30th year in power.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.