Türkiye set to unveil most inclusive debt restructuring package ever

Turkish citizens are set to be offered the most comprehensive restructuring package, allowing them to restructure various types of debt, from water bills to insurance premiums.

The government tripled the minimum wage in the past year, raised state salaries and hiked pensions for millions to ease the economic pressure on households, driven by stubborn inflation.

Consumer prices in Türkiye have moderated over the last months after hitting a 24-year high in October and inflation in December decelerated at its steepest pace in more than a quarter century.

Annual inflation fell to 64.27% last month from the 84.39% reported in November. The decline was driven mainly by the so-called favorable base effect and marked a second straight fall after inflation hit a peak of 85.5% in October.

The decline is expected to become more pronounced in the first quarter of this year and is expected to drop to as low as 40% by mid-2023.

The minimum wage has been increased by 55% for 2023 and Recep Tayyip Erdogan also announced a measure that would allow more than 2 million people to retire early. He said the minimum wage may be hiked again throughout the year if necessary.

The new debt restructuring package will be the most inclusive in the history of the republic.

The package will cover debt before Dec. 31, 2022, including tax debt, insurance premiums, legal and administrative fines, student housing loans, motorized vehicle tax, traffic tickets, unpaid road tolls, customs fines and others.