Iran Economy NewsIran: Raisi’s Economic Promises Increased Poverty

Iran: Raisi’s Economic Promises Increased Poverty

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During the presidential debates last year, the main promise of the Iranian regime’s latest president Ebrahim Raisi was to solve the country’s countless economic crises and the Iranian people’s back-breaking livelihood challenges. Raisi’s administration was later donned the ‘young Hezbollahi’ government by the regime’s supreme leader, Ali Khamenei.

Raisi’s weak and catastrophic performance over the past year has shown that this government is anything but a young and progressive administration.

When he rose to the presidential role, Raisi introduced his inflation reduction program as follows:

  • The reformation of management and governance systems, and the carrying out of important economic plans, without any clear schedule.
  • Plans to create a million jobs annually.
  • The annual construction of one million houses.
  • Not linking the country’s economy to foreign policy

In the review of Raisi’s promises, the Etemad newspaper wrote, “Now that one year of this government has passed, we have unfortunately witnessed an increase in the inflation rate due to various reasons such as untimely and inappropriate price correction, lack of liquidity control, failure to reach the agreement of the JCPOA, weak economic management of the government. And as a result, we are increasing the price of some goods and services.”

According to the official statistics announced by the regime’s Statistics Center, the point-to-point inflation in June 2022 equaled 52.5 percent, and by July it had reached 54 percent.

In July, the annual inflation rate increased to 40 percent in urban areas and 43.2 percent in rural areas, whereas the annual inflation rate at the end of July 2018 and July 2019 was 34.8, 36.4, 40.2, and 40.5 respectively.

Households in Iran have spent an average of 52.9 percent more than in June 2020 to buy a set of goods and services, the inflation rate of June 2022 was also the highest rate among the monthly inflation rates since 1979 and hit a record of 12.2 percent.

There is no doubt that the main source of inflation, which continuously assaults people’s livelihoods, is caused by the regime’s budget deficit and the disproportionate increase in liquidity with the GDP.

Etemad added, “There has been a contradiction in the government’s plans from the beginning. On the one hand, promises of fighting inflation are given, and on the other hand, mega-projects such as million housings, which have been proven by experience, provide them with resources, cause a huge budget deficit and inevitably increase liquidity. The printing of money is inevitably included in the government’s plans.”

According to Etemad, the increase in average wages has always been much lower than inflation, and it goes without saying that the result of this equation has been the catalyst for the increase in poverty, the continuous decrease in purchasing power, and the shrinking of the livelihood basket of the Iranian people, especially among the deprived and middle classes of the country.

According to the investigations of the Tehran Chamber of Commerce, the inflation rate in Iran during April and May 2022 was 16 times the inflation rate of Saudi Arabia, 6.7 times of Iraq, and 2.7 times of Pakistan.

The continuation of the high inflation rate will further affect the weak and less privileged sections of society more than anyone else, and contrary to the regime’s claims and promises, it will lead to the impoverishment of everyone.

As far as the economic performance of the regime is concerned, it can be concluded, that in the past year, not only the promise of single-digit inflation has not been fulfilled, but the middle and poor classes of the society have also become poorer than before, and every day as time passes, this will add to the population of the waste collectors on the streets of Iran’s cities and towns.

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