Turkey strolls the lowest salary by 55% as inflation and living cost problem bite

December 23, 2022: Turkey declared a stroll of its lowest wage by 55% Thursday amid a cost-of-living crisis that has tumbled millions into financial hardship, hammered small businesses and rendered many unable to afford essential goods.

The move aims to ease the impact of growing living costs, but economists worry it will further surge inflation. The country’s official inflation rate is at a 24-year high of 84.4%.

In a televised speech from Ankara Thursday, Turkish President Recep Tayyip Erdogan said that the monthly minimum salary would be 8,500 lire ($455) starting in 2023. Over 30% of Turkey’s workforce is on the minimum salary, according to Turkish officials.

There is a political angle; country analysts said Turkey’s general election will be held in June 2023.

Timothy Ash, an ongoing markets strategist at BlueBay Asset Management, said in an email, “Motive win the election. Impact higher inflation.”

The country’s inflation rate slowed for the first time in over 18 months in November, up 84.4% annually, slightly decreasing from 85.5% the month.

“Minimum wage is on the top in Turkey in the previous 20 years,” Ragip Soylu, Turkey bureau chief for Middle East Eye, tweeted. “It will go well with Erdogan’s core voters as it did in July.

He will get some points. However, it will be essential to see whether the impact will continue until the presidential elections.”