Turkey raised the minimum wage for a second time this year, adding to inflationary pressures that could make the country’s new economic team’s job harder.
(Bloomberg) — Turkey raised the minimum wage for a second time this year, adding to inflationary pressures that could make the country’s new economic team’s job harder.
The monthly net minimum wage will rise by 34% to 11,402 liras ($483) this month, Labor Minister Vedat Isikhan said in televised comments from Ankara.
The move will restore some spending power among workers, over a third of whom earn the minimum wage. But it could fuel inflation just as the government pledges to bring it down to single digits.
President Recep Tayyip Erdogan overhauled his economic team after re-election last month, bringing in names with Wall Street experience amid promises to curb price increases and restore investor confidence.
Mehmet Simsek, the new Treasury and Finance Minister, has said he’ll adopt “rational” policies during his term. The central bank, under new governor Hafize Gaye Erkan, is expected to raise its policy rate to 20% from the current 8.50% on Thursday, according to the median estimate in a Bloomberg survey.
Turkey’s annual inflation currently stands at 39.6%, after peaking at 85.5% last year.
(Updates throughout with context.)
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