Iran Economy NewsIran Economic Crisis Increases Election Boycott

Iran Economic Crisis Increases Election Boycott

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The state-run media in Iran admitted on Saturday that the country is in an economic crisis and that the Iranian people hate the regime for this, which is why the Iranian people are taking part in a nationwide boycott of the elections.

The Ebtekar daily explained in an article on inflation that the price of basic food items has increased by 1.7 million tomans in just a few days.

It wrote: “Today, we can no longer see the effects of wage increases, the same wages that [officials]claimed should not be increased. Now even this small increase has disappeared. In one sentence, this situation could be described: ‘The livelihood security of wage earners is in serious danger.”

While the Aftab-e Yazd daily warned the authorities that the consequences of this crisis could really be the end of the current ruling theocracy, saying that the government has failed to “increase social tolerance” and the officials’ shortcomings, not least the skyrocketing prices of goods, has led to widespread protests.

It wrote: “Pay attention to the list of skyrocketing prices. The prices of various goods, both domestic and foreign, are rising each second, and no one is responsible… Put yourself in the position of a worker or retiree who has a statistic salary. Are these people motivated to have political participation? Even if a candidate gathers one hundred thousand people in a Clubhouse interview, how on earth would that help those whose earnings do not cover one portion of meat per month?”

The Donya-e Eghtesad spoke about the elections, saying that it doesn’t matter who becomes the next president because these economic crises are not solvable under the current ruling theocracy. They suggested that whoever the president is will only maintain the status quo and that this will cause more challenges, including inflation of 50% and zero growth.

The same day, the Javan daily wrote: “Over the past three decades, and especially the last eight years, the people’s faith, hope, beliefs, and trust in the system have been damaged. Thus, the political participation of the people has decreased. People are well aware of the fact that those behind the current situation can demand changes or change the situation in favour of the people.”

The Hamdeli daily advised that the system is lacking “popular legitimacy” and cannot form a “social movement” because it is unable to pull the wool over the eyes of the people with fake notions of reform and it cannot handle the current “political polarization”.

Another aspect of this economic crisis are the high prices of the people’s basic goods.

The state-run news agency ISNA on May 23 on this issue reported about a 70 percent of increase in the prices of six groups of food items. The report then added, that since the beginning of 2021, the increase of inflation in three indicators: monthly, annually and point-to-point has been triggered, while the point-to-point inflation, which indicates the increase in household spending compared to the same period last year, has reached 50 percent.

Oil prices have risen by 30 percent. The unbridled price of the basket of goods of Iranian households in other items is also on the rise. Other items which include these groups: ‘tea, coffee, cocoa, soft drinks and juices’ with an increase of 78.4 percent, ‘milk, cheese and eggs’ with an increase of 75.3 percent, ‘fish and shellfish’ with an increase of 73.1 percent, ‘red meat and poultry’ with an increase of 72.9 percent and finally the group ‘red, white meat and its products’ also increased by 72.9 percent.

In other goods, we can mention the 69.6 percent increase in the cost of ‘sugar, jam, honey, chocolate and sweets’ group, and home appliances and furniture also increased by 67.6 percent.

In terms of the annual inflation, the highest amount belongs to the transport group with 65.1 percent, oils and fats 61.3 percent and furniture and home appliances with 53.7 percent.

Iran’s statistics center said in a report that the annual inflation rate in May 2021 had reached 41 percent, which was an increase of 2.1 percent compared to the previous month.

In its report, the Statistics Center describes the record-breaking liquidity and inflation of 41 percent in the government of Rouhani as the ‘boiling point of inflation’ and wrote:

“Point inflation refers to the percentage change in the price index number compared to the same month last year. The point inflation rate in May 2021 reached 9.46 percent, meaning that the country’s households spent an average of 9.46 percent more than in May to buy a ‘set of identical goods and services.’”

The report also referred to another factor of inflation that takes place through banks, entitled ‘The creation of unruly money by banks, an important factor in causing inflation in Iran’ and wrote:

“Banks create a lot of fiat money on a daily basis, of course, and cause the country’s liquidity to increase continuously. In fact, the main reason for the significant increase in liquidity in Iran, which is a high figure compared to other countries, is the creation of fiat money. The most important loss resulting from this action of banks is the increase in inflation. In fact, it is the creation of unruly money by banks that has caused Iran’s liquidity growth to always be far ahead of economic growth and to create an inflation giant.” (State-run daily Vatan, May 23, 2021)

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