Simultaneously with the devaluation of the Iranian rial and the increase in the price of the US dollar, there has been a severe inflation in prices, particularly in the cost of essential necessities, exacerbating the already challenging conditions.
On January 21, 2024, Farhikhtegan newspaper ran an article titled, “Institutionalized inflation in the country’s economy,” and warned that “we must explore and investigate last year’s protests and disturbances from this perspective,” referring to the nationwide protests of 2022-2023.
On January 20, Etemad online quoted Vahid Shaghaghi, an economics professor at Kharazmi University, about the causes of “inflationary engines in the Iranian economy.” He said, “Key imbalances in the Iranian economy, which serve as inflationary engines, include imbalances in the water sector, electricity sector, pension funds, oil and gas sector, and gasoline sector, along with land price depreciation. These are among the most significant imbalances in Iran, with their intensity far exceeding the imbalances in the budget and banking system. Each of these imbalances, on its own, contributes to the illumination of the inflationary engine in the Iranian economy.”
On January 15, the state-run Hamdeli newspaper quoted Shaghaghi as saying, “Our main problem is not the 3 quadrillion-rial budget deficit and the imbalance in banks. Today, the issue in Iran’s economy is the lack of 500 billion dollars, equivalent to 250 quadrillion rials, to cover and compensate for imbalances in electricity, gas, water, gasoline, and land price depreciations.”
He further added, “We still don’t fully grasp the depth of the catastrophe, and until to understand the true depth of it, we cannot address the issue. Addressing it requires a genuine and deep understanding of the problem. Otherwise, there is no possibility of treating that illness or resolving the issue… Due to imbalances in electricity and gas, we are forced to cut off gas to companies and industries in winter, and electricity in summer. However, since imbalances are intensifying, these imbalances will also affect households.”
Vahid Shaghaghi, emphasizing that “these imbalances act like a crack in a wall that, after a while, suddenly collapses,” and warning about the social consequences of electricity, gas, and gasoline imbalances, as well as pension funds. Referring to the water crisis and land subsidence, he said, “At this rate of land subsidence in Isfahan, south of Tehran, and… we are completely losing some cities. The Tehran plain has a land subsidence rate 100 times higher than the global average. Water imbalance and land subsidence are connected, but their places of struggle and control are different from each other. We even get anxious just thinking about the consequences of water imbalance.”
He considers crisis such as budget deficits and bank corruption as “simplifying the issue” and believes that by ignoring the crisis caused by the destruction of structures, “highlighting the imbalance of banks and budget imbalance is giving the wrong address.”
This is just a glimpse of the consequences of a 40-year systematic corruption and the crises resulting from the destruction of structures that are acknowledged by regime experts. These are crises that the authoritarian regime of the clerics neither wants nor can resolve. Therefore, the ruling regime in Iran, each year, attempts to conceal the destruction of economic structures and the potential for social explosion by selecting flashy titles such as “Knowledge-based Production and Job Creation” for 2022 and “Inflation Control, Production Growth” for 2023, and repeating empty phrases like “Leap in Production,” “Progress,” and “Peak.” At the same time, the regime tries to prevent or delay the next nationwide uprising through warmongering.
On January 15, Bahar news outlet quoted economist Hossein Raghfar as saying, “In my opinion, given the current economic conditions, the country’s officials must now accept responsibility for future unrest in the country.”
