Inflation at 84 percent: Erdogan raises the minimum wage again

The minimum wage in Turkey has tripled within a year.

Inflation at 84 percent: Erdogan raises the minimum wage again

The minimum wage in Turkey has tripled within a year. It is President Erdogan's attempt to alleviate the consequences of inflation. Translated into euros, however, people have less in their pockets.

Turkey's President Recep Tayyip Erdogan has announced the third increase in the minimum wage in a year amid ongoing massive inflation in the country. Erdogan, who has to face a presidential election next year, also promised a "quick drop in inflation from the end of the month". According to official data, consumer price inflation in Turkey was 84.4 percent in November.

However, according to a group of independent economists, the actual rate of inflation in the country is more than twice as high. In addition, the Turkish currency lost almost 30 percent of its value in the past year.

According to Erdogan, the minimum wage is now to rise from January 1 from 5,000 to 8,500 Turkish lira per month (the equivalent of around 428 euros). In December 2021, the minimum wage - which over 40 percent of Turks receive - was still 2,826 lira, which was around 456 euros at the time.

Economists hold Erdogan's financial policy largely responsible for the high inflation. The president had repeatedly put political pressure on the Turkish central bank not to respond to rising consumer prices in the country by raising interest rates and instead to lower interest rates. The conventional wisdom is that higher interest rates dampen demand, thereby slowing inflation.

Instead, the Turkish government used financial reserves to support the national currency and implemented complex economic rules to control inflation. "We will see a rapid fall in inflation rates starting this month," Erdogan assured. The inflation rate will drop to 20 percent by the end of next year.