The government announced a 55-per cent increase in the official minimum wage for 2023 to a monthly 8,500 Turkish liras ($453), raised salaries for civil servants, and hiked pensions by 30 per cent to ease households’ pressure stemming from runaway inflation.
Turkey has ushered in the new year with significant pay hikes for minimum-wage earners, pensioners, and civil servants amid a cost-of-living crisis that has plunged millions into financial hardship.
Inflation remains alarmingly high despite a sharp drop to 64.2 per cent in December 2022, down from 84.3 per cent reported in November after hitting a 24-year high in October, Xinhua news agency reported citing data from the Turkish Statistical Institute.
Annual food prices rose by 77.9 per cent in December, down from 102.6 per cent in November, while energy prices increased 118 per cent, down from 94.4 per cent compared to the previous month.
The government announced a 55-per cent increase in the official minimum wage for 2023 to a monthly 8,500 Turkish liras ($453), raised salaries for civil servants, and hiked pensions by 30 per cent to ease households’ pressure stemming from runaway inflation.
President Recep Tayyip Erdogan also announced a measure that would allow over 2 million people to potentially retire immediately, but the spending spree as a result of the measure is expected to swell the budget, according to experts.
The government has as well launched a long-awaited income housing loan campaign for mid-income citizens and relief measures for businesses.
Erdogan, who faces tight presidential and parliamentary elections in June, had promised a serious drop in the inflation rate in the new year.
“We expect similar base-driven effects to continue for a few more months, bringing inflation down to 40 percent in the period leading up to the election,” Enver Erkan, chief economist at Istanbul’s Tera Securities, said in a note to investors.
“Despite this, we still need to talk about a public expenditure increase that can feed periodic price increases before the election,” the expert warned.
siasat.com