In its latest report on the change in the prices of food and non-food items, the Iranian regime’s Statistics Center has announced that the inflation rate reached 40.02 percent at the end of the 1400 Persian calendar year (March 2021 – March 2022), which the center claims had decreased by 1.2 percent when compared to February of this year.
The publication of these statistics that are far removed from the reality of the situation, which is appalling, especially while the lives of Iranian citizens continue to be destroyed by poverty, and their backs are broken under the burden of the extremely high prices which are not commensurate with their incomes.
The most important commodity group for the people is food and beverages, which in the recent report of the Statistics Center of Iran, has remained unchanged compared to last month. They point out that the inflation rate for the major food, beverage, and tobacco groups is reported to be 40 percent.
The Statistics Center collects a basket containing several foodstuffs and announces its average price changes compared to the previous month and year as the inflation rate. This is a deceptive method that is repeated constantly, while the food items most needed by the people include a wide range of items that are not counted in the Statistic Center’s basket.
Experts say most of the inflation that puts pressure on people comes from food groups such as rice, meat, oil, tomato paste, chicken, eggs, dairy, sugar, tea, and sugar. Although the regime allocates the preferred 42,000 rial currency to control the prices of some of these items, these goods reach the people at the free-market exchange rate and foreign exchange resources are practically wasted.
The regime’s Statistics Center, like many of its other institutions, is politically driven and fulfills the objectives set by the regime, which is to project a normal situation despite the precarious state of the Iranian economy. Almost all the regime’s institutions are obliged to convey the regime’s-specific narrative of the facts to the people.
According to independent economic experts, what the Statistics Center publishes as a report on price changes is designed to cover up the regime’s economic failures.
When the mullahs took power in Iran more than four decades ago, they claimed to be the champions of the oppressed and the deprived and pledged to spread justice. But they have brought Iranians a devastated economy, mismanagement, and endemic corruption.
Even the regime’s supreme leader Ali Khamenei was forced to admit as much, stating, “The result of all government and banking support and the prevention of foreign competition has practically led to higher prices. And in the field of justice, we acknowledge that we are left behind.”
While some pro-government pundits expect to see a revival of the Iranian economy if and when a new nuclear deal is signed with the West, the vast majority of Iranians are convinced that the windfalls from the new deal will have absolutely no effect in improving their livelihood.
The economic equations show that although the nuclear deal and the release of blocked foreign exchange resources will have a positive impact on the Iranian economy in the short term, the country is still in a vicious cycle of inflation due to the weak foundations of production and the weakness of its industry. In other words, because the industrial sector lacks sufficient production capacity, and at the same time banks are trying to print money, the ratio of liquidity to GDP is always above 20 percent.
This vicious cycle of creating unequal liquidity versus insufficient production is like a machine creating inflation that is increasing the army of the poor every year. Therefore, even if the Western countries and the regime make an agreement and the regime’s sanctions are lifted, no one can have real hopes in the reduction of inflation and economic pressures on households.
The economic situation of Iran in the new year is quite bleak. Persistent unemployment, unfulfilled public expectations, and, consequently, the spread of public discontent and protests. The issue of eliminating the preferred 42,000 rial currency will further increase the distance between the people and the regime, something about which the regime experts are warning constantly.
In the documents leaked by the cyber group Edalat Ali, the regime’s security officials warned of the consequences of eliminating the 42,000 rial currency and explicitly acknowledged that this strategic mistake would come with a cost to the regime. Most likely, the regime’s decision to eliminate currencies allocated to medicine and other basic goods is part of a process that will contribute to the regime’s demise.