Turkey Raises Minimum Wage by 30%
Turkish President Recep Tayyip Erdogan announced that the net monthly minimum wage in Türkiye will reach 22,104 Turkish Liras (approximately $630.36) in 2025, marking a 30% increase compared to 2024.
Economists predict that this increase in the minimum wage will lead to higher inflation rates in the coming months. This decision affects around 9 million workers and serves as a benchmark for private sector salary increases.
Investors have warned that any increase exceeding 30% could disrupt the inflation forecasts set by the central bank, complicating the timing of the first potential interest rate cut since February 2023. The minimum wage is considered one of the key factors shaping Turkey’s economic policy.
Turkey’s inflation rate dropped to 47.09% in November, down from a yearly high of 75% in May.
Bloomberg quoted Professor Selva Demiralp from Koç University in Istanbul, saying, “Since wages are adjusted according to the expected inflation for 2025, this would make the central bank’s task easier… The likelihood of interest rate cuts is higher now.”
Policymakers expect inflation to decrease to 21% by the end of next year from the current 47.1%. The central bank’s Monetary Policy Committee is set to announce its interest rate decision tomorrow, with most economists surveyed by Bloomberg expecting a 50% cut.
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