TÜSİAD warning on minimum wage: 'It has become a subsistence level'

The Central Bank has kept the policy rate steady at 50 percent. While the decision was in line with market expectations, the interest rate, which has remained unchanged for eight months, has sparked new debates in the business world. The Central Bank had previously raised its year-end inflation forecast from the 38 percent set at the beginning of the year to 44 percent.

WARNING FROM TÜSİAD

Speaking at the Investment Summit organized by the Aegean Industrialists and Business People Association (ESİAD), TÜSİAD Board Chairman Orhan Turan stated that caution should be exercised regarding interest rate cuts. According to the report in Ekonomim, Turan emphasized that some success has been achieved in the fight against inflation, but the process must be managed carefully.

Turan used the following expressions:

"An interest rate cut that we see too early could damage the success we have achieved in this process and cause the process to prolong. We must be very careful, as we have already begun to feel the cost of this, especially on the industrial side, both in terms of high financing expenses and the slowing of demand."

Turan also emphasized that public spending must be controlled more strictly and highlighted the importance of social consensus in the fight against inflation.

CALL FOR INTEREST RATE CUTS FROM THE BUSINESS WORLD 

Business circles, pointing out that high interest rates increase financing problems, renewed their demands for interest rate cuts. Industrial representatives, in particular, expressed that they expect an interest rate cut from the Central Bank to alleviate the cost burden.

IS THE MINIMUM WAGE THE CAUSE OF INFLATION?

Labor unions also joined the interest rate and inflation debates. Making statements ahead of the minimum wage negotiations, TÜRK-İŞ President Ergün Atalay said that inflation should not be associated with the minimum wage. Atalay stated the following:

"There has been no raise in the minimum wage for a year, yet inflation continues. This means the minimum wage is not the cause of inflation. The minimum wage has become a subsistence level. This is not a correct metric for this country. The minimum wage should be a wage that allows a minimum-wage earner to live humanely."