Ankara, Turkey – Turkish government has announced a 34 percent increase in the monthly minimum wage, effective from July 1.
The decision was reached by the minimum wage assessment commission, following negotiations between workers and employers, according to Labour Minister Vedat Isikhan.
The new minimum wage will amount to a net of 11,402 lira ($483) for the second half of the year. This move comes as Turkey grapples with a cost-of-living crisis caused by high inflation rates.
In October of the previous year, inflation reached a 24-year peak at 85.5 percent. In response, the government increased the minimum wage by 100 percent throughout the course of the year.
To mitigate the impact of rising prices on citizens, the government provided free natural gas, which helped reduce annual inflation to 39.6 percent in May. The country’s currency, the lira, has faced significant depreciation, declining by 21 percent since the May elections.
In an attempt to stabilize the economy, President Tayyip Erdogan, who was re-elected, has indicated a willingness to implement interest rate hikes. This shift in policy was reinforced by the appointments of Mehmet Simsek as finance minister and Hafize Gaye Erkan as the central bank governor.
The central bank is expected to announce an increase in interest rates during its policy-setting meeting on Thursday. The current rate stands at 8.5 percent, and it is anticipated that the bank will begin to raise it to combat inflationary pressures.