ANKARA: A 20 billion lira ($6.9 bln) rise in Turkey’s minimum wage from January will have a positive impact on economic growth but could push up inflation and unemployment, the country’s labour minister said on Wednesday.
Suleyman Soylu told a news conference in the capital Ankara that the government would cover around 40 percent of the cost of the hike in the minimum wage, which is due to come into effect on Jan. 1, but only for 2016.
“We expect the rise to add 0.5-0.8 percentage points to inflation, but it will have a positive effect on growth,” Soylu said.
“The rise in the minimum wage may cause employment to fall by a similar amount, but the additional measures we will take will reduce the impact.”
The planned 30 percent wage increase, promised by the ruling AK Party in the run-up to a Nov. 1 election at which it won back its parliamentary majority, has triggered concern over the cost to the private sector, with critics warning of job losses.
Soylu said the government would shoulder around 9.7 billion lira of the burden in 2016. He said around 8.5 million people would benefit from the wage hike.
($1 = 2.9083 liras)
(Reporting by Ercan Gurses; Writing by Nick Tattersall and Ece Toksabay; Editing by Asli Kandemir)
Reuters
