Last Updated on 11/03/2023
In an effort to protect residents from the detrimental impacts of inflation, President Recep Tayyip Erdoğan stated on Thursday that the minimum wage in Turkey will increase as of January 1st, 2023. He was also optimistic about the inflation in Turkey and he predicted previously its soon decline by the new year.
The minimum wage in Turkey will increase starting from January 2023
According to the Turkish president’s recent declaration, the net minimum salary for single people will increase to TL 8,500 ($455) per month from TL 5,500 ( July 2022) per month in a televised speech from the country’s capital, Ankara. This brought an increase of 54.5% in 6 months and reflects an average annual growth of more than 70%.
The third increase in the minimum wage in Turkey in a year
This is the third increase in the past year. Beginning in 2022, the government implemented a 50% increase, raising the minimum wage to TL 4,250. To protect households from skyrocketing inflation, the Turkish government agreed to boost the minimum wage in Turkey again by 30% in the middle of the year. Thus it increased to TL 5,500 per month, beginning on July 1st, 2022.
Another increase is eventual
According to Erdoğan’s statement, In the event of “unexpected” occurrences, the government might consider another increase in the minimum wage in Turkey. He also stated his predictions that inflation will fall to as little as 30% in the first half of 2023.
Inflation in Turkey to decline by the beginning of 2023
High inflation in Turkey has been a continuous challenge for more than twenty years. Although the government efforts succeeded to make it stable for many years, the inflation rate has been recording the highest rates since 2020. However recently the country has been marking optimistic data. In fact, after reaching a 24-year peak in October, annual inflation fell below 85% last month. As a result of the base effect and declining energy prices around the world, it is anticipated to shrink significantly in the first half of 2023. Moreover, the TUIK’s recent figures referred to an upbeat forecast of an increase in the consumer confidence index. In fact, it rose for the sixth consecutive month, reaching its highest level slightly over a year in November 2022.
The Turkish government continues its efforts to boost the economy
The Turkish president previously emphasized the extensive efforts the government was making to get rid of the factors other than cost rises that were causing high inflation. The government has backed low-interest rates as part of an economical program with the ultimate goal of lowering inflation by turning the nation’s current account deficit into a surplus. This economic program aims to increase exports, production, and investment as well as create new jobs.
Moreover, in accordance with Erdoğan’s requests for stimulus, the Turkish central bank ended the easing cycle last month by bringing down its benchmark policy rate by 5 percentage points since August to 9% from 14%.
Single-digit interest rate to decrease the inflation
The new Turkish economic model adopts the idea of low-interest rates for stable inflation. In fact, the Turkish president considers high inflation as a result of high-interest rates. Therefore, he had predicted single-digit rates by year’s end. Moreover, in order to mitigate the effects of inflation, the government has adopted a number of relief measures, including a restriction on rent increases, lower utility tax rates, and a sizable housing project that was just launched for low-income families.
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