Turkish government bonds tumbled and the lira hit a new record low after a 49% minimum wage hike, that threatens to fuel inflation and puts investors on alert for pre-election populist measures from President Recep Tayyip Erdogan.

The government raised the net minimum wage for 2023 to 17,002 liras ($578), a level which Goldman Sachs Group Inc. and Morgan Stanley had suggested would force the central bank to further tighten monetary policy.