Iran Economy NewsIran’s Government at the Brink of Collapse

Iran’s Government at the Brink of Collapse


One day before the rejection of the general budget by Iran’s Parliament (Majlis), an expert of the so-called reformist faction said that the approval of the parliamentary integration commission “put the country on the brink of a dangerous precipice.”

The 2021-22 budget bill provided by President Hassan Rouhani’s government was submitted to the parliament with a 46 percent expansion compared to last year, and this was causing the society’s economy to become more and more critical. Nonetheless, the parliamentary commission approved another 35 percent and heat up the country’s economy more than before.

They increased the size of the general budget from 841 trillion tomans to 1143 trillion tomans. He warned his audience to be aware of the dire, dangerous, and catastrophic consequences of this dramatic change.

Iran: 2021-22 Budget Bill and Economic Crisis

Throwing All the Lower Classes into Misery and Poverty

One government-linked economist touched on the consequences of such budgets which are ruining people’s lives. “In economies facing a crisis of total supply, the extreme financial expansion would mean throwing the entire lower classes into the mire of misery and poverty. We will have a much sharper inflation outlook than we have seen in the last three years,” ILNA news agency wrote on January 31.

What is even sadder is that this year the index of misery (inflation and unemployment) has crossed the unbelievable mark, and with this plan and others that both factions of the government are carrying out, we should expect a wave of millions of hungry people.

According to even fake statistics of this government, “In 2017, the misery rate reached nearly 20 percent (19.8 percent). In 2018, it crossed the 37 percent mark. In 2019, it went above 45.5 percent and in November 2020, it reached the threshold of 70 percent,” wrote Etemad daily on November 3, 2020.

Corruption the Other Side of Production Collapse

This tragedy, of course, was confirmed by international monitoring bodies with other related indicators. Previously, a report by Transparency International stated that the Iranian government ranked 149th out of 180 countries in terms of corruption in 2020.

However, with the policies of inflation and anti-occupation (misery) of President Rouhani, the rank of the Iranian government fell another 18 steps and became one of the most corrupt countries in the world, according to the monitor’s most recent report.

“The production costs index in 2019 has exceeded 65 percent. When the index of producer costs is higher than the consumer index (41.5 percent), it means that they lead the country to the abyss of falling productivity and imposing humiliating dependencies on the outside world,” wrote Taodol daily on November 3, 2020.

Unbridled Poverty, An Inherent Outcome of Iran’s Systematic Corruption

Falling Oil Revenues

During November 3, 2020, Majlis’s session, Mohammad Bagher Nobakht, the Head of the Plan and Budget Organization, stated in private and addressed to Majlis Speaker Mohammad Bagher Ghalibaf, “Government revenues without oil exports are not enough to cover the budget expenditures of 2021.” “In the information that I cannot disclose, it is clear that the income from oil exports has experienced a terrible decline,” Jahan-e Sanat daily quoted Nobakht on the same day.

Forecast of 400 Percent Inflation

In examining the country’s budget in the Majlis, some horrific facts and predictions were made, which show that the government’s hands and pockets are empty, despite their propaganda to present a different image.

“Next year, we will see inflation of more than 400 percent because the currency of 42,000 rials has reached 175,000 rials, which means it has quadrupled,” an MP said.

“The society does not tolerate more than this. In the budget, we will see inflation of more than 40 percent, while we will also have a budget deficit. Lack of stable income, more than 30 percent of oil dependency, the persistence of astronomical salaries, tax pressure,” Tejarat daily quoted the MP as saying on February 3.

Why the Dollar Price in Iran Continues to Rise?

We Have No Choice but to Print Banknotes to Provide Resources

Abdolnasser Hemmati, the governor of the Central Bank of Iran (CBI), who is frustrated with opening a way for foreign currencies to enter and no longer has any idea how to get out of this predicament, said that in the current situation, there is “no way other than printing banknotes” to finance.

“He described the source of the funds as, ‘Monthly payment of livelihood plan to 60 million people’, and at the same time, he said printing banknotes causes ‘increased inflation’ whereby ‘everyone is harmed,’” the official IRNA news agency quoted him as saying on February 3.

In any case, after a two-month dispute between the Rouhani government and the Majlis over the 2021-22 budget bill, it was rejected in general, so that in practice, a result can be drawn from all this controversy, and that is one word: ‘None’

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