On July 19, the Iranian state media launched a new wave of propaganda, claiming that Iran is among the world’s wealthiest states. The Jahan-e Sanat daily reported that “Recent statistic surveys show that Iran’s economy has been ranked as the 14th world’s great economy.”
They added, “According to the International Monetary Fund’s studies, Iran’s Gross Domestic Product’s value has reached $7.1 trillion in 2022. Iran’s $7.1-trillion economy is still far from the developing and welfare indicators; however, it has placed above countries like Mexico, Turkey, Spain, Sweden, and Saudi Arabia.”
This significant report attracted audiences spontaneously. Particularly, those economists and politicians who closely follow the financial news about Tehran, including the rampant inflation, unprecedented poverty, the government’s stellar debts to the banking system, systematic corruption, and massive budget deficits.
However, these reports fail to tell the whole truth about the current situation in Iran. In reality, citizens across the country are left to rummage through waste bins to make ends meet, families’ food baskets have shrunk, and many youths are forced to either sell their body organs to afford their relatives’ expenditures or are driven to commit suicide.
What the people of Iran are experiencing on a daily basis is completely different from the results of so-called ‘studies’. It begs the question, what is the source of these misleading reports? This distinction between reality and the stories from international bodies is rooted in Tehran’s mysterious banking system.
The government has officially declared that the USD trades for 42,000 rials. In reality, any USD is trading against 300,000 rials in the bazaar, showing a sharp depreciation in the Iranian national currency’s value.
In this respect, the mullahs have completely misguided the international bodies, including the IMF, in accounting for the GDP value. In other words, Iran’s real GDP should be calculated based on the rial’s valuation provided by experts, such as Prof. Steve Hanke, who offer a weekly #CurrencyWatchList.
The Iranian rial is yet another central bank junk currency. By my measure, the rial has depreciated against the USD by 55.45% since Jan 2020, which is why #Iran takes the 8th place in this week's Hanke’s #CurrencyWatchlist. The Iranian rial is in the tank. pic.twitter.com/enwY8EItP8
— Steve Hanke (@steve_hanke) August 23, 2022
The Iranian government has routinely refused to join the Financial Action Task Force in order to hide its corrupt and fraudulent stats. Due to the mullahs’ and Revolutionary Guards (IRGC) untransparent and tax-exempted institutions, it is impossible to obtain an actual estimation of Iran’s economy.
Aside from these facts, the state media has revealed Raisi’s massive budget deficit. On August 18, the Abrar daily wrote, “The Raisi government experienced a 200-trillion-rial budget deficit from March to June 2022.” Notably, this deficit only accounts for four months, not the whole year, indicating that the Raisi government’s deficit is far higher than this amount.
In a nutshell, the mullahs have tried to fish in muddy water, inspiring their disappointed forces about a ‘shiny future’. They can no longer defuse society’s volcanic situation and the ongoing socio-economic protests.
As the government faces financial dilemmas and has been entangled by public hatred, the mullahs are still funding extremist groups and proxy conflicts in the Middle East at the expense of Iranian citizens, as they sink society into further poverty and misery.