These days, Iran has been swept by the fifth coronavirus wave since the pandemic began in early 2020. While citizens need decent nutrition, the price of essential goods has once again increased. In such circumstances, Covid-19 patients, in particular, witness additional difficulties.
Local reports from the central province of Isfahan point to unusually high prices. “Today, I went shopping for some red meat, but I saw was bones being sold for 400,000 rials [$1.50] per kilo. This is while the market had a discount, and it was previously selling it for 720,000 rials [$2.66],” said a woman.
In a July 23 dispatch, Mehr news agency titled, “The chicken flew from people’s food basket.” “I saw a big notice on a chicken shop, declaring, ‘Poultry for 249,000 rials [$0.92] per kilo.’ I hastily entered the shop and asked, ‘Sorry, have you brought government-subsidized chicken?’ Shopkeeper impatiently answered, ‘Have you just been awakened? The period of government-subsidized chicken has been over,” Mehr reporter wrote.
“Once again, I asked the shopkeeper, ‘How much is poultry per kilo right now?’ ’400,000 rials [$1.50],’ he shortly answered. ‘At least, put down the notice of ‘Poultry for 249,000 rials per kilo’ and do not harass clients,’ I told him with annoyance,” the reporter added.
On August 15, state-run media reported a 20-percent increase in dairy prices. The semiofficial Beytoote website laid blame on the dairy association. “Twenty-percent increase in dairy prices on behalf of producers / The spokesperson of dairy industry association: We have not remained to wait for the government’s decision,” the website titled.
In his interview with Tasnim news agency, association spokesperson Mohammad Reza Bani-Taba pointed to the official increase in the price of raw milk. “There is no bill for increasing the dairy products. However, regarding an official increase in the raw milk price, we have to increase the price of our products,” Bani-Taba said.
“The association sent official letters to the President, Industry Minister, and Agriculture Minister. However, the raw mild price did not change… Government officials receive salaries to make the correct decisions in such circumstances, but they have left the dairy industry in a suspended situation. We cannot shut down dairy factories until officials make decisions,” he added.
Furthermore, the government faces massive budget deficits. Massoud Mir-Kazemi, the new chief of the Budget and Planning Organization, revealed damning details about the country’s bankrupted economy.
He revealed that the government’s debt to the banking system was 1.04 quadrillion rials in the beginning of former President Hassan Rouhani’s tenure in 2013. Currently, this debt is over 6.50 quadrillion rials, showing a four-fold increase in eight years.
To compensate for its massive deficits, the government resorted to two paths. First, increasing the price of essential goods such as the shocking 200-percent increase in gas prices in November 2019 ignited a nationwide protest in 200 cities across the country.
Second, the government ordered the Central Bank of Iran (CBI) to print unsupported banknotes, leading to unprecedented liquidity in Iran. For instance, despite the four-fold increase in the government’s debt to the banking system; however, the value of 6.20 quadrillion rials is too lower than 1.04 quadrillion rials in 2013.
This liquidity directly impacted people’s food baskets while their purchasing power is vanishing as their pockets are being filled with unsupported money. In this status quo, the catastrophic is too complicated than being resolved by claims and publicity stunts.
In this respect, Mir-Kazemi anticipates further economic failures under new President Ebrahim Raisi and mentions there is no possible solution for the government. “The situation is very tough, and we deliver the government in undesirable condition. This year’s budget has deficits. Why have the government’s ordinary expenditures reached 9 quadrillion rials [$33.333 billion]? These expenditures had a ten-fold growth. So, do we have a nice economic condition? What shall we do in the coming years?” Tasnim quoted him as saying on August 15.
