Iran’s economy has not reached the end of the year (Persian calendar 1399) when the official economists warned and sounded the alarms bells and showed the ruling system a dark vision.
Mahmoud Jamsaz, one of these experts, believed that “Iran’s economy in 2021 (1400), according to the current characteristics and variables of the economy will be accompanied by intensifying inflation and a further decline in GDP.” (Entekhab, March 9, 2021)
His argument like many other economists was that in the past three years constantly the country’s economy is facing a rapid decline in growth. The value of the national currency has fallen from 3000 tomans to 25000 each US dollar, which is an eight times fall.
Therefore, the public income is decreased too, and the poverty and social gap have been intensified so that more than 60 percent of the population are now living under the poverty line. A poverty line that according to the officials is now 10 million tomans and most incomes even do not reach this border a are just 2.8 million tomans. That’s meaning that these people are just struggling to survive, and a proper living has become a dream.
And that just in a situation when these people can find a job to gain this little income, and there is no discussion about white contracts which do not promise anything to the workers and the employer can cut off their loan and dismiss them.
These forecasts are more realistic about the country’s economy than the promises of the new president Ebrahim Raisi. These economists said the rampant and chronic inflation has become one of the main pillars of the country’s economy and the others are: “Liquidity that has reached more than 3705 trillion tomans today and is going to break the record of 4000 trillion tomans.” (Eghtesad Online, August 4, 2021)
The next pillar is the continuous increase of the government budget deficit, which is the source of funds of the regime’s corrupted factions who are stealing officially from the people in their favor, and the parliament also seals its approval.
“Rouhani took over the government from Ahmadinejad with a budget deficit of 53,000 billion Tomans, he will now hand over the government to a president with a budget deficit of 350,000 billion Tomans in 2021.” (state-run website Quds, August 3, 2021)
Now there is significant liquidity in the country, it is predicted that by the end of this year, the liquidity will reach approximately 4.600 billion tomans. The next challenge is the issue of inflation, which has made the Gini coefficient significant and has widened the class gap between the deciles. The next issue is the budget deficit.
The government’s debt to the Central Bank, and borrowing from the bank’s printing house, is an astronomical figure, which, of course, the new President Ebrahim Raisi has no choice but to continue this path, that is, printing worthless money. The central bank released a report on a 24 percent increase in government debt to the central bank last year. Government debt to the Central Bank has increased by more than 70% compared to June last year.
And the effect on the people is that for example, the purchase of bread by the people has decreased by 30%. The people of Iran have given up buying meat, fruit, rice, and other necessities a long time ago, but can they stop purchasing bread?
It is said that the cost of the simplest foodstuffs per month is more than half of the minimum wage of an Iranian household.
“If one eats only bread and tomato omelet every day and every night. According to market prices, he must set aside about 100,000 tomans for two 30-ounce eggs (2 eggs per serving).
“The average price of a loaf of bread after announcing the new rate is 3,000 Tomans. Therefore, for 30 days, he must set aside about 100,000 tomans to buy bread. Assume that 3 to 4 tomatoes are used at a time in these repetitive omelet meals.
“In this case, he needs to buy about 3 to 4 kilos of tomatoes per month, the approximate price of this purchase is 30,000 tomans. By adding the price of frying oil to the cost of eating 2 omelets a day, the cost of this ‘suicide’ reaches about 300,000 tomans per month. Not including public transportation, water, electricity, and gas, rent, etc.
“It seems that even this impossible assumption monthly salary is not enough for the cost of a month of simple living in Tehran.” (Hamshari, 31 July 2021)