Turkey has announced an unexpected surge in its minimum wage, impacting around 7 million workers, a move anticipated to further elevate the already high inflation rates in the upcoming months, according to economists and sector authorities.
Labour Minister Vedat Isikhan declared on Wednesday that the monthly minimum wage for 2024 would be 17,002 lira ($578), marking a 49% increase from the previously set level in July and a remarkable 100% surge from January.
Economists have expressed concerns, noting that this wage hike is likely to contribute to a medium-term worsening of the inflation outlook. Even before this announcement, inflation was projected to reach approximately 70%-75% in the first half of 2024.
Commenting on the situation, Berke Icten, the head of Turkey’s Shoes Manufacturers Association, suggested that a two-step increase in the minimum wage would have been more prudent for both employees and employers, avoiding a sudden inflation spike. He further estimated that prices could witness an increase of at least 25%-30%, impacting retail prices accordingly.