Turkey’s economic turmoil is worsening amid a fresh bout of currency depreciation, but a deafening silence reigns over the country’s leading business groups as few seem to have the courage to openly criticize President Recep Tayyip Erdogan and his government.

The freefall of the Turkish lira has meant a 48% increase in the price of the dollar over a year, threatening to send inflation out of control. And the COVID-19 pandemic, which is picking up anew, has only compounded the economic tumult plaguing Turkey since mid-2018. 

In October alone, the price of the dollar rose 9%. The Central Bank stood by, unlike in September, when it had raised interest rates to prop up the lira. The bank’s inaction only fueled the rush for dollars as many feared that they could be late in seeking the safe haven of hard currencies. Strikingly, hard currency has come to account for about 60% of individual deposits in Turkey.

Higher foreign exchange prices translate to a higher cost of anything that Turkey imports, including inputs and intermediate goods needed by local industries. The jump in producer prices totaled 6.3 percentage points in September and October, while the year-on-year increase exceeded 18%, though the full impact on consumer prices has yet to be seen. Consumer prices rose 3.1 percentage points in September and October, hitting nearly 12% over a year. Independent researchers say the actual inflation rate is much higher than the official figure.