(Bloomberg) — A prominent businessman in Turkey sounded the alarm on the impact of the central bank’s tight monetary policy to control inflation, saying the private sector is operating in a tough and costly environment.
In a speech delivered in Istanbul, Erdal Bahcivan, chairman of the Istanbul Chamber of Industry, also warned that the current environment is having a sociological impact “very different” from past episodes of high inflation.
“Every passing day that we live with high inflation exacerbates the sociological and psychological impact on the society,” Bahcivan said. “It should be said that we have underestimated this matter. We didn’t think we’d see such a grave outcome.”
Bahcivan said the government’s program seems to rest on monetary policy alone, adding that businesses expect “concrete steps” on structural reforms.
“It’s not easy to continue manufacturing and investments with commercial loan costs reaching 70%,” he said, Such conditions prove that Turkey’s private sector is making sacrifices and “this sacrifice has limits,” Bahcivan added.
The criticism follows months-long speculation over the fate of Treasury and Finance Minister Mehmet Simsek, with rumors that he resigned or was fired by President Recep Tayyip Erdogan reemerging frequently despite firm denials.
In a display of discontent over government policies, farmers took to the streets in various provinces over the past weeks and some even destroyed their produce in protest of low prices. Labor confederations have also started organizing protests.
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