Turkish consumer prices rose significantly in January following the sharp increase in the minimum wage. They increased by an average of almost 65 percent compared to the same month last year, the statistics agency announced on Monday. From December to January alone, prices rose by 6.7 percent, more than twice as much as in December.
Consumers were asked to pay more, especially in the healthcare sector and in hotels and restaurants.
Experts had expected higher inflation after the unexpectedly large increase in the minimum wage at the beginning of this year. Labor Minister Vedat Isikhan announced that the monthly minimum wage would rise to 17,002 liras (513 euros). This represents an increase of 49 percent compared to July levels.
Compared to January 2023, it has even doubled. About seven million Turks will benefit from the higher wage floor.
Interest rates of 45 percent
The figures come after the surprising resignation of central bank chief Hafize Gaye Erkan on Friday evening. Since last June, the country has aggressively raised interest rates from 8.5 percent to the current 45 percent to curb inflation. Her successor, Fatih Karahan, is expected to continue the restrictive policies. “We will monitor inflation expectations and price developments,” Karahan said on Sunday. “We stand ready to act if the inflation outlook deteriorates.”
Influential Turkish President Recep Tayyip Erdogan, an outspoken opponent of interest rates, elevated the former deputy governor to the top post on Friday. Incumbent Erkan had previously resigned unexpectedly after less than eight months. The former financial manager cited personal reasons for her dismissal. She was the target of a campaign to damage her reputation.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
