Iranians shop at an open market in the Islamic republic’s capital Tehran, on April 24, 2019. (AFP)

August 1, 2020

That the Iranian regime’s economic situation is getting worse day by day is not an unexpected event. The situation is so bad that state media cannot hide it anymore and are forced to confess about it.

While they are trying to make the sanctions and the arrival of the coronavirus accountable for this situation, their writings reveal the regime’s mismanagements as the main cause.

State-run website ANAJ wrote on 1 August: “ANAJ studies show that the prices of many consumer items in Tabriz market, in addition to increasing at the beginning of the year, have been accompanied by an average growth of 40% in the middle of the year. Continuing high prices. People have been shocked by the dramatic increase (of prices) in items and public necessities, and there is almost no monitoring of rising prices.

“Almost all consumer goods have increased by an average of more than 35% since the beginning of this year. Also, a 35% increase in the cost of transportation, a more than 50% increase in rent, as well as a 100% increase in supplies and household items should be considered.

“This is while the workers’ wages have increased by about 30% in the new year, and it can be clearly stated that the backs of the people are bent under the burden of unbridled inflation.”

With the title, “The throat of the Iranian people in the grip of the exchange rate”, the Saat-24 website wrote: “The average price of one dollar in 2011 was about 10,000 Rials. The average price of one dollar in the last 130 days has been 220,000 Rials. A very simple calculation shows that the price of each US dollar as the most attractive valid currency in the Iranian free currency market has increased at least 22 times since 2011.”

“The fact is that in these 10 years, especially in 2018, 2019 and the last 130 days, the value and amount of Iran’s crude oil exports have fallen sharply, and the government and the central bank have lost the main source of foreign exchange earnings and they do not have the previous ability to supply the market with the foreign exchange.

“The important and political point, however, is that suppliers of all types of public and private goods and services tie the price of their goods to exchange rate changes, and rightly or wrongly to the extent that the price of the dollar rises against the Iranian rial and toman. They are increasing the price of goods and with a new balance of prices a new equilibrium of relative prices of goods and services in Iran with the exchange rate has emerged and we are witnessing rapid inflation.

“The worst part, however, is that the wages of workers and employees, who make up a large part of Iran’s population and their families, are not compatible with this rapid increase in the price of dollars and goods and are far behind.

“In this way, their purchasing power decreases and the level of the physical welfare falls, and the number of the poor population increases.”

Nesf-e-Jahan quoting Saeed Leylaz, an economist, wrote: “We are now in an unusual and super-critical situation, so I can say that Iran’s economy has not been under such pressure since the Mongolian invasion.” (Nesf-e-Jahan website, 1 August)

In a tweet, Prof. Steve Hanke revealed the truth about the regime’s inflation and wrote: “The #StatisticalCenterOfIran is putting out BOGUS numbers. In its latest report, it claims #Iran‘s #Inflation is 26.4%/yr. NOT TRUE. By utilizing high-frequency data & SOUND science, I measure Iran’s #Inflation @ a stunning 98%/yr! Iran’s corrupt govt produces corrupt “facts”.

INU

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.