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Turkey’s President Recep Tayyip Erdogan announced an interim minimum wage hike for the first time in six years on Friday as Turks battle with soaring living costs.
The monthly net minimum salary will be raised by 29% to 5,500 liras ($328), Erdogan said Friday in Istanbul in a televised speech, citing high inflation and the depreciation of the local currency.
Consumer inflation is the fastest in nearly a quarter century and now on track to reach an annual 80%, threatening Erdogan’s appeal ahead of elections scheduled for next June. Fanned in part by high global energy and food prices, the run-up in costs has eaten into disposable income.
More than 40% of all workers in Turkey earn the minimum wage, according to the country’s Social Security Institution. Turkey raised its minimum wage by a record 50.5% in January.
Erdogan expects inflation to ease to “reasonable levels” at the start of next year and has sought patience from citizens.
Turkey’s central bank has opted for an ultra-loose monetary policy, running the world’s deepest negative interest rates when adjusted for inflation. By contrast, central banks worldwide are opting for monetary tightening to combat inflation.
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