The cabinet of the Iranian regime President Ebrahim Raisi promised to reduce the country’s economic dilemmas and people’s livelihood problems and to boost the country’s economy.
State media, however, while quoting the Regime Statistics Center and official government numbers, are reporting that the claims made by Raisi and members of the cabinet are wrong, and not only has the country’s economy and people’s livelihood not improved but inflation and commodity prices have risen.
“In early November, the increase in food and beverage prices in the country during the 12 months leading to October this year compared to the same period last year (annual inflation) was 61.4 percent, which is a new record in food inflation. This inflation and this figure can be described as ‘hyperinflation’ and have crossed the limits of normal inflation. The U.S. dollar exceeding the 280,000 rial threshold sounds means an alarm that must be heard,” according to a November 14 report by the state-run Etemad daily.
“According to reports issued by Iran’s Statistic Center, inflation in October was announced at 45.4 percent. These numbers show staggering inflation on paper, but the most frightening part of this phenomenon is felt in the daily lives of millions of people, especially in major cities. Very high cost of food and supplies, astronomical rents rate, travel costs, skyrocketing health care costs, … all are imposing enormous pressure on the middle class,” according to a November 16 report by the state-run Mostaghel daily.
Also, the state-run Mardomsalari daily ran a piece titled: “Price of goods rises 79 percent, surpassing the critical level”. The article reads in part: “A study of the price chart of selected items in comparison with the trend of changes with the desired limits shows that in October, the average price of about 79 percent of selected items including first-class Iranian rice, first-class foreign rice, poultry, pasteurized milk, pasteurized yogurt, Iranian pasteurized cheese, eggs, pasteurized butter, vegetable cooking oil, bananas, apples, oranges, cucumbers, potatoes, pinto beans, lentils and sugar, foreign tea are beyond the critical price range,” according to a November 16 report by the state-run Mardomsalari daily.
However, the economic situation is so dire that the regime, even through its own official statistics, is forced to acknowledge that conditions are now “beyond the crisis.”
“One of the promises made by the Raisi cabinet was to immediately address the economic problems of the vulnerable sectors of our society. However, the daily increase in prices during their first 100 days in the office does not show any clear prospects for improving the poor people’s livelihoods. Now that the preferential exchange rate is to be eliminated, prices are skyrocketing again across the board, and even if direct subsidies increase, the poor people are still considered to be extremely vulnerable,” according to a November 14 report published by the state-run Etemad daily.
The situation of the poor and vulnerable in Iran is such that the quality of food is no longer important to them, and they are merely attempting to obtain food and satisfy their daily needs.
The status quo indicates that many sectors of Iran’s society have crossed the line of absolute poverty and reached the “survival” line while desperately trying to make it out alive.
The root of this situation is clear even according to government experts, being institutionalized and structural corruption. As such, every economic project and plan in Iran, despite the quantity and quality, becomes a source for rent and looting by government officials.
“Up to $55 billion of currency based on the preferential exchange rate ($1 = 42,000 rials) has been distributed across the country,” but the result was not a reduction in prices, and in connection with that, it has resulted in “many cases of rent and economic corruption,” according to Mohsen Zanganeh, a member of the regime’s Majlis (parliament).
(Note: the free-market exchange rate of the U.S. dollar is 280,000 rials)
“The Preferential exchange rate has been used to supply up to $8 billion in seven items of goods. Since the beginning of 2021, the cabinet of [former regime president Hassan Rouhani] and [the Raisi cabinet] have used the total amount of $8 billion to supply seven items of goods based on the preferential exchange rate,” Zanganeh added according to a November 6 report by the state-run Eghtesad Online website.
If this money was spent on buying basic goods for the people and distributed in the market based on the 42,000 rials per dollar exchange rate, prices would definitely not have skyrocketed throughout Iran.
However, instead of buying goods, the money ($8 billion and $55 billion) is being stolen by government rent-seekers, and the goods they imported were sold to the people at prices many times higher.
Therefore, the economic road ahead for the mullahs’ regime will lead to a dead-end and escalating social tensions that bear dangerous potentials for the regime’s future. This undeniable reality has kept many senior regime officials awake at night.