iran rial

Over the past three years, Iran’s economy has rapidly deteriorated. Ongoing sanctions regimes, increasing inflation rates, persistent government corruption, political conflict, and the consequences of the coronavirus have significantly transformed Iran’s economic landscape. In August 2021, Ebrahim Raisi rose to power with promises of reform in Iran. However, thus far, his administration has done little to fulfill these promises. 

The ongoing economic crisis has significantly impacted millions of Iranians. Over the past several years, approximately 1 million Iranians have lost their jobs, and the unemployment rate has risen more than 10%. Inflation is also rampant. In August 2021, the inflation rate rose to 45.2%, the highest in 26 years. In addition, food prices have also soared. For example, the cost of essential food items such as cooking oil has jumped by 94%. The cost of dairy products has risen 71%. As a result, many Iranians struggle to make ends meet, and the hunger and poverty rates are increasing. Simultaneously, capital flight has grown to a staggering $30 billion, reflecting a major withdrawal by foreign investors and a significant blow to Iran’s global economic prospects. While many of these figures are staggering, experts note that the situation in Iran is likely far worse. The Iranian regime has a reputation for underestimating metrics, including inflation and unemployment metrics. The government is also deeply entrenched in corruption. Over the years, the regime has continuously prioritized economic opportunities for Iran’s elite rather than for its people. 

As the economic situation in Iran worsens, many Iranians feel as if they have no way out. In October, Ruhollah Parazideh, an unemployed father of three based in south Iran, self-immolated after he could not obtain sufficient employment opportunities and economic support from a foundation that helps war veterans and their relatives. According to Iran’s reformist newspaper Etemad, the suicide rate in Iran has increased at an alarming rate of 4% since the onset of the pandemic. 

Although the economic crisis in Iran is getting worse by the day, the Iranian regime has done little to rectify the situation. In fact, recent reports indicate that during a recent meeting with economists, President Raisi demonstrated a concerning lack of comprehension of the causes of the economic crisis. Additionally, experts have noted that the Raisi regime is focused on foreign policy rather than domestic issues. For many years, the Iranian government has invested significant resources in expanding its geopolitical power in the region, intending to undermine Israel’s influence. Given the deterioration of Iran’s domestic situation, many Iranians are angry that the regime has chosen to prioritize foreign policy matters.

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