President Erdoğan signals considerable hike in minimum wage and interest rates

President Recep Tayyip Erdoğan hinted at a potential increase in the minimum wage following ongoing negotiations and also signaled that he would not prevent Mehmet Şimşek’s expected interest rate hike decision. Erdoğan made the comments while answering the questions of press members on the plane on his return from foreign trips.

Duvar English

President Recep Tayyip Erdoğan answered the questions of the press members on the plane upon his return from his visits to the Turkish Republic of Northern Cyprus and Azerbaijan. He signaled various changes in the economic administration of the country due to the new appointments to the Treasury Ministry and Central Bank. 

Even though Erdoğan said that suggesting that he would “make a serious change in interest rate policies” would be a misconception, he added, “I remain the same on this matter. However, considering the current thoughts of our Treasury Minister, we have agreed to accept his decisions in coordination with the Central Bank. We have also conveyed our determination to reduce inflation to single digits in this way.”

Erdoğan’s appointment of Mehmet Şimşek as Treasury Minister and Hafize Gaye Erkan to head of the Central Bank sparked discussions on a possible change to the government’s long-lasting policy on lowering interest rates despite the soaring inflation. 

Nonetheless, Erdoğan pointed out that they were able to lower inflation to one digit even though interest rates were lower when he was the prime minister.

“We did these things together (with Mehmet Şimşek back then), and we have told our Minister that we should follow the same way. We worked with the theory of ‘low interest, low inflation’ back then," he said. Erdoğan added that they still have the same understanding now and he believes that they can achieve this aim with the same economic policy. 

Erdoğan also added that the head of the Central Bank was appointed after the suggestion of Şimşek and he also wanted a “lady” in the administration. 

Answering a question regarding the ongoing minimum wage negotiations between the government and unions, he said: “We will definitely not let our workers be crushed by inflation again. Our workers should be comfortable and peaceful at this point. Work is being done right now, and I hope we will make a decision as soon as possible. The step regarding the salaries of civil servants will be taken in the negotiations in July.”