BREAKING: Government Lifts Minimum Wage By 34% To Address Inflation (DETAILS)

BREAKING: Government Lifts Minimum Wage By 34% To Address Inflation (DETAILS)

Turkey raised monthly minimum wage by another 34% beginning on July 1, the government said on Tuesday, bringing it to a net 11,402 lira ($483) for the second half of the year in an effort to address soaring inflation.

“The minimum wage assessment commission completed its work with an agreement between the workers and employers,” Labour Minister Vedat Isikhan said in announcing the decision.

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A customer shops in Istanbul, Turkey, January 19, 2023. REUTERS/Dilara Senkaya/File Photo

Inflation is well above the official 5% target and touched a 24-year peak of 85.5% in October, prompting Ankara to raise the minimum wage by 100% over the course of last year.

Annual inflation dipped to 39.6% in May as the government provided natural gas free of charge, offsetting price rises in other goods.

The cost-of-living crisis was largely brought on by an unorthodox policy of slashing interest rates despite rising prices, which stoked a late-2021 currency crisis. The lira has shed another 21% so far this year, mostly after May elections.

However, re-elected President Tayyip Erdogan has signalled he is ready to pivot to rate hikes after appointing Mehmet Simsek as finance minister and Hafize Gaye Erkan as central bank governor.

The central bank is holding its policy-setting meeting on Thursday and is expected to start ramping up its rate from 8.5% currently.

($1 = 23.6072 liras)