Minimum wage warning from Moody's

In a report by Moody's, which signaled that Turkey's credit rating could be upgraded to positive, a note was included stating that minimum wage hikes, price increases, and slowing growth are increasing inflationary pressure.

"POSITIVE" SIGNALS HAD BEEN GIVEN

Moody's stated, "The outlook could be upgraded to positive if a tight monetary stance is maintained and wage agreements are consistent with the CBRT's goal of significantly reducing inflation."

Moody's Investors Service published a "Credit Opinion" report for Turkey. In its report, Moody's assessed that "Turkey's rating outlook is stable. The return to orthodox monetary policy is definitely positive."

"INFLATION RISK"

Moody's report is as follows:

"Headline inflation is likely to rise further in the near term, and inflation expectations remain very high. The most significant near-term risk is excessive wage increases, which could further exacerbate demand-driven inflationary pressures. The minimum wage, which serves as a benchmark for broader wage agreements, is typically increased every January. A sharp slowdown in growth poses another risk, as this would increase the risk of a return to previous unconventional policies."

News Source: 12punto