Mahfi Eğilmez warns: Will the IMF decide the 2025 minimum wage?

Economist Mahfi Eğilmez evaluated the IMF's comments on the minimum wage during a live broadcast he joined on CNBC-e.

Regarding Turkey’s BRICS membership, Eğilmez said, “Even if Turkey is not a member, it is intertwined with BRICS. If BRICS evolves toward a separate military alliance, it may not be very suitable for us. If it is an economic union, there is no problem with us being there. Our trade with Europe is balanced; with this side, we are always in deficit.”

In his assessments on inflation, Mahfi Eğilmez explained in the following words that an expectation that inflation will fall has not been created in society:

“A lot of steps have been taken on inflation. Interest rates were raised, reserve requirements were adjusted and some regulations were made. But we could not change expectations. Society has not entered into an expectation that inflation will fall. The Medium-Term Program target is 17.5 percent. The market expects 24 percent for 12 months later, the real sector 40-45, and households 74-75 percent. How do households affect prices? Because they think inflation will be high, they will demand more of the shampoo they see as cheap. This expectation has not changed. The risk of persistence is here. The biggest risk is here. We could not change this. Expectations about the future need to change; we need to do what we did in 2001. Back then, people’s expectations changed with structural reforms. Today, we do not have a step that changes expectations.”

WHAT HAD THE IMF SAID?

The International Monetary Fund (IMF) had warned against making a large increase in determining Turkey’s 2025 minimum wage.