Iran’s economy, over the past two decades, has faced devastating challenges. These challenges are clearly observable in assessments of the country’s economic changes at three major turning points, specifically the years 2005, 2014, and 2023. According to economists, despite political, social, and international changes, the overall size and structure of Iran’s economy have not undergone significant transformation. This situation, particularly regarding economic growth, GDP, and overall economic performance, is seen as a profound indicator of inefficiencies and economic crises.
Lack of Fundamental Transformation in Iran’s Economy
On January 25, Shafaqna news agency quoted economist Farshad Momeni as saying, “The size of Iran’s economy remained nearly unchanged at the turning points of 2005, 2014, and 2023. This means even if oil reaches about $140 per barrel, our situation doesn’t improve; moving toward the JCPOA doesn’t help either, and extreme or suspicious stances against the JCPOA are successful—none of these have any impact on our economic performance.”
He added: “If we turn our backs on the goal, even if we are a member of FATF, it won’t do us any good.”
Focus on Maximizing Personal Gain
This economist admits that in the Iranian regime’s economy, the focus on maximizing personal gain has overshadowed national interests. This trend has led to a mismatch between economic measures and policies with the country’s long-term interests, fundamentally exacerbating systematic and structural weaknesses.
What this economist is trying to express in a rounded, general, and neutral manner—so as not to offend the regime Supreme Leader Ali Khamenei—is in fact the systemic and structural corruption that dominates Iran’s economy. At one point, Khamenei himself, in an act of deflection, referred to this type of corruption as a “seven-headed dragon.”
Consider this part of his comments:
“From the perspective of development-oriented political economy, we have encountered a phenomenon that, in the mildest terms, can be called a stagnation trap and a systemic dysfunction trap. Our way out is to change the tracks that brought us here. It must be understood that continuing past trends will not provide solutions for us.” (Ibid)
This is nothing but rounding off the issue and downplaying its disgrace. In his own wording, he is saying that there is no conceivable way out except to change the “tracks” and abandon the “continuation of past trends.”
Inflation and Unstable Economic Policies
One of the continuously highlighted major problems in the clerical regime’s economy is the inflationary and destabilizing policies. Momeni emphasizes the injustice these inflationary policies inflict on various social groups, acknowledging the serious challenges in this regard. Inflationary policies have been detrimental to production and innovation, directly impacting the motivation for investment and entrepreneurship in businesses. Meanwhile, rising inflation directly harms producers and small and medium-sized enterprises, while profiteers and rent-seekers benefit from it.
“Inflationary policies are unjust; they fatten the freeloaders and punish the hardworking… It is a bitter irony that over the past three decades, inflationary policies have been implemented under the guise of justice, and what is even worse is that annual reports from the Central Bank indicate that under shock therapy, for every one percent increase in the exchange rate, investment motivation drops by approximately 24 percent.” (Ibid)
The Paradox of Knowledge-Based Companies’ Growth and a 34% Drop in Production!
Official reports state that during the 2010s, the growth rate of knowledge-based companies was 12,700%, while at the same time, the country’s per capita production dropped by 34%.
“Mere posturing, empty showmanship, and false advertising will not get us anywhere. Regarding what is being said about artificial intelligence, we must keep in mind that AI itself requires as much electricity as an entire city. Similarly, when it comes to the business environment, we must be careful not to fall into the same trap we did under the guise of ‘knowledge-based’ enterprises.” (Ibid)
Referring to how “industrial production in Iran is going through one of its most sorrowful historical periods,” this economist states, “With the 2025 budget bill, they have sidelined the productive private sector and made financial opportunities for manufacturing enterprises increasingly difficult.
“In taxation policies, they have even eliminated the remaining minimal support for productive activities, and the details of this are astonishing. In a situation where access to financing is extremely difficult, businesses are penalized for merely delaying a single loan installment. However, a report from the Iranian Parliament’s Research Center states that in 2023, a single bank alone was responsible for 57 percent of the growth in the monetary base due to its misconduct and corruption—yet no one takes action against it.”
He also questions the Iranian Parliament’s Research Center report from November 2024, stating:
“The monetary authority not only turns a blind eye to the highly corrupt banks that severely undermine macroeconomic stability by fueling speculative activities, but the oversight data it releases about them is heavily manipulated.” (Ibid)
These statements require no further explanation—they are merely the tip of the iceberg when it comes to corruption in the clerical regime.
It is obvious that resolving the incurable crises and structural challenges is not possible with advice, recommendations, sermons, and pleas. A glimpse of what was mentioned clearly shows that the house is ruined at its foundation.
Resolving economic crises is not possible under this regime or within the framework of its economic policies. Like other aspects of life, the economy is a function of the prevailing political system in Iran. As long as this system—one that generates crises, misery, and hardship—remains in place, any prospect of change in Iran’s economy or an improvement in people’s livelihoods is neither imaginable nor achievable.