Turkey is experiencing a “grave outcome” in society as it reaps the consequences of high inflation, the chairman of the Istanbul Chamber of Industry has warned.

At the same time, the private sector is operating in an environment that’s tough and costly given the impacts of the central bank’s tight monetary policy introduced to control inflation, Erdal Bahcivan on August 28 cautioned in a speech given in Istanbul reported by Bloomberg.

Bahcivan cautioned that the present environment was causing a sociological impact “very different” from what was seen during past episodes of high inflation. 

“Every passing day that we live with high inflation exacerbates the sociological and psychological impact on society,” Bahcivan was cited as saying, adding: “It should be said that we have underestimated this matter. We didn’t think we’d see such a grave outcome.”

The chamber of industry chief’s comments came as Bugra Gokce, head of Istanbul Planning Agency (IPA), sounded the alarm over how some 6.5%, or 1.3mn, of Istanbul’s population, go to bed on an empty stomach.

“There is a significant strain on household economies,” Gokce said, highlighting the acute cost of living crisis faced by inhabitants of Turkey’s commercial and cultural capital, home to 16mn people (or around 20mn according to some unofficial estimates taking into account undocumented residents).

In further comments reported by Bloomberg, Bahcivan expressed concern that the government’s economic programme appeared to rest on monetary policy alone, while pointing out that businesses expect “concrete steps” on structural reforms. 

“It’s not easy to continue manufacturing and investments with commercial loan costs reaching 70%,” Bahcivan said. Such a situation proved that Turkey’s private sector was making sacrifices and “this sacrifice has limits,” he added. 

Amid the economic pain, farmers have taken to the streets across Turkey throughout August to protest at being unable to make a decent living. There have been angry scenes as farmers have dumped produce including tonnes of tomatoes on roads and blocked highways with tractors. Demonstrations by labour confederations are also increasingly being organised. 

Other tensions in society have been caused by reports that students are unable to go to universities of their choosing due to Turkey’s crisis with high rents putting accommodation out of reach and the government’s decision to, despite ongoing steep inflation, not introduce a July minimum wage hike as that would be out of line with the fiscal tightening wanted by markets as Ankara attempts to address pressure for an end to the country’s stark economic imbalances.

The country’s hunger threshold, an indicator that calculates the minimum amount of money required per month by a four-member family in Ankara to avoid severe hunger issues, rose to Turkish lira (TRY) 19,271 ($565) in August, surpassing the minimum wage by TRY 2,269, according to a report issued this week by the Confederation of Turkish Trade Unions (Turk-Is).