Six months before the parliamentary and presidential elections in Turkey, President Recep Tayyip Erdogan, who is under pressure from high inflation figures and poor poll numbers, is making it possible for millions of workers to take early retirement.

About 2.3 million workers could take early retirement “immediately”, regardless of their age.

Necessary prerequisites for this are a job subject to social security contributions of 20 to 25 years and a start of work before September 1999, when the retirement rules were changed.

After Erdogan's announcement, according to Turkish media reports, long queues formed in front of the offices of the social security institution on Thursday because thousands of citizens wanted to use the new rule.

So far, the retirement age is 58 for women and 60 for men.

There are currently 13.9 million pensioners in Turkey.

While Erdogan declined to quantify the additional costs, agencies quote government circles as saying the project will cost around 250 billion lira (12.5 billion euros) in the first year.

The amount is likely to increase in the coming years as the number of workers benefiting from the scheme is expected to reach five million.

In addition, an aid package is also planned for employers who have to pay severance payments to the employees concerned.

The Turkish state budget for the new year 2023 has so far provided for expenditure of 4.47 trillion lira (224 billion euros).

National debt is comparatively low at around 40 percent of gross domestic product.

Also raise the minimum wage

Erdogan said his government is trying to alleviate the consequences of the economic and financial crisis for citizens.

By raising the minimum wage, public salaries and pensions, she has shown that she is on the side of the workers.

"And we will continue to do so," Erdogan said.

Just last week, he announced that he would raise the minimum wage by 55 percent to 8,500 from 5,500 lira (431 euros) at the beginning of January.

About 40 percent of the employees in Turkey are paid according to the state-determined minimum wage.

As with the previous two increases, those for pensioners and civil servants are likely to follow.

Erdogan is thus reacting to the galloping inflation of 85 percent, with the price increase for food and housing more than doubling within a year, according to official data.

In December, it is likely to decline due to the statistical base effect after the strong increase at the end of 2021 and falling energy prices worldwide.

Economists, but also organizations like the OECD, also see home-made mistakes as the cause of the continued depreciation of the national currency, the lira, and the skyrocketing rate of currency devaluation.

intervention in the central bank

Because the president has forbidden the central bank to fight inflation with high interest rates.

Instead, he has forced them to lower the key interest rate to 9 percent, which corresponds to a real interest rate of minus 76 percent.

He wants to use cheap money to boost the export industry and fuel growth, which is partially successful.

However, the forces of growth have been noticeably slowing down recently.

The OECD expects gross domestic product to increase by 3 percent in 2023 after 5.3 percent this year.

"The risks are high and are likely to increase," she says in her most recent economic report on Turkey.

Among other things, it states: "Further significant minimum wage increases could also trigger additional wage and price pressure."

A “negative confidence shock” due to growing macroeconomic imbalances could lead to a chaotic adjustment process, which in turn could trigger more lira depreciation and a surge in inflation.

In order to avoid this, structural reforms and a higher key interest rate are necessary.

Government aid should be temporary and target the most vulnerable to contain fiscal costs.