A report from Iran’s Majlis (Parliament) Research Center shows that, with the poverty rate stabilized above 30.1%, one-third of the nation’s citizens are unable to meet their basic needs.
According to the report, Iran’s poverty rate reached 30.1% of the population in 2023, and projections from the Majlis Research Center indicate this rate will remain at the current level in 2024.
The poverty rate in Iran has risen significantly since 2018, reaching 31% in 2019. Over the past five years, this rate has only dropped below 30% once, in 2022, by a margin of just 0.3%.
Experts note that due to the relative stability of poverty rates over the past few years, it can be concluded that the 30% poverty rate in Iran has become entrenched.
The stabilization of the poverty rate implies that the percentage of the population living below the poverty line remains steady, with no immediate improvement in their living conditions.
The latest findings from the Majlis Research Center indicate that the poverty gap (the income disparity of the poor relative to the poverty line) in Iran has reached 0.28.
This index, which measures the income gap of the poor relative to the poverty line, reflects the likelihood of escaping poverty. Essentially, the wider the poverty gap, the lower the chances for the poor to escape poverty.
These statistics indicate that while economic growth is typically a key remedy for rising poverty, Iran’s poverty rate has grown despite a 4.5% economic growth in 2023.
A look at poverty indicators shows the poverty gap decreased slightly from 0.28 in 2022 to 0.27 in 2023. In other words, in 2022, the poor earned on average about 72% of the poverty line income, which rose to 73% in 2023.
In effect, using the 2023 poverty line, the poor have slightly higher incomes than in 2022; however, this marginal income increase has not been sufficient to alleviate poverty or reduce the poverty rate.
Reasons for the Spread of Poverty in Iran
Experts believe the main causes of poverty expansion in Iran are macroeconomic instability and persistently high inflation.
Statistics show that over the past decade, sustained high inflation has significantly eroded the economic power of the population annually, leading to a rise in the impoverished population.
The main reason behind the rise in poverty in Iran, despite economic growth, is the high contribution of oil to economic growth, meaning that economic growth in Iran is not inclusive.
In other words, Iran’s economic growth in 2023 has not been inclusive, and the lower-income deciles have not benefited from this growth.
According to Iran’s Central Bank data, Iran’s economic growth in 2023 was 4.5% including oil, and 3.6% excluding oil.
The Research Center’s report on the rise in Iran’s poverty rate indicates that the government’s support policies in recent years have been unsuccessful, with the cost of fulfilling subsidy commitments becoming a heavy burden on the budget.
The Center, reviewing the latest developments in Iran’s economy, emphasized that policymakers should avoid inaction and delays, instead pursuing gradual reform policies to address some of the existing imbalances.
The Research Center stresses the need for appropriate solutions to tackle energy imbalances, banking imbalances, budget deficits, and price stabilization policies.
In 2018, the World Bank announced that approximately 420,000 Iranians were living below the absolute poverty line. Additionally, according to the Research Center’s 2018 report, between 23% and 40% of Iran’s total population lives below the poverty line.
It is worth noting that these government statistics are not entirely reliable, as the Iranian regime often attempts to portray conditions as better than they are. However, official statistics can still provide a basis for comparison.
