Faramarz Tofighi, a labor activist, criticized Iran’s 2025 budget proposal and the “continuous liberalization measures by Pezeshkian’s administration and its adjustment policies,” stating that “foundational support measures are being eliminated” in this proposal.
In an interview with the state-run ILNA news agency, Tofighi objected to the fact that “the budget for certain special institutions has increased” while noting that there is no allocation in the budget for building power plants or ensuring electricity for the public; he claimed the aim is merely to raise prices.
Tofighi also commented on the currency policies in the budget proposal, stating that “systemic corruption in currency management is entrenched in the economy,” and instead of addressing this issue, preferential foreign exchange is being removed. “This way,” he argued, “the government earns revenue, but people become poorer.”
ILNA reports signs of “price liberalization” and “elimination of government subsidies,” stating that next year, due to a $3 billion reduction in the import budget, an increase in the preferential exchange rate in line with inflation, and the liberalization of energy prices, including electricity, expenses will rise significantly.
ILNA also cited statements from the Ministry of Energy announcing that “electricity prices will increase according to the law, and henceforth, citizens, especially high-consumption users, must source their electricity from the open market and renewable sources.”
The news agency pointed to another sign of “price liberalization” from statements by Mojgan Khanlou, spokesperson for the Budget Office, who announced that Pezeshkian’s administration has planned a gradual increase in the preferential exchange rate for next year, “aimed at controlling inflation.”
According to the report, next year’s budget includes a gradual increase in the preferential exchange rate for importing essential goods and medicines, which will be adjusted in line with annual inflation.
The report claimed that if inflation in 2024 reaches 30%, the preferential exchange rate for the euro will be set at 403,000 rials and for the dollar at 370,000 rials. These figures refer to the preferential rates that the government uses to purchase essential goods. Currently, the market rate for the dollar in Iran is 700,000 rials, and for the euro, it is 752,000 rials.
The ILNA report claims that, in the event of 40% inflation, the dollar will be set at 400,000 rials. These changes will drive up the prices of essential goods, such as chicken meat, which depends on preferential exchange rates and livestock feed imports.
According to ILNA, which is affiliated with the regime-aligned Workers’ House organization, the budget for importing essential goods and medicines has been reduced by 20% in the upcoming budget, dropping from $15 billion to $12 billion.
Tofighi added that higher energy prices will drive up the costs of all goods and services, imposing severe inflation on the economy.
He reiterated his belief that systemic corruption in currency management has taken root in the economy, and rather than solving this issue, preferential exchange rates are being eliminated. “This way,” he emphasized, “the government earns revenue, but people become poorer.”
The labor activist asked, “Should we expect chicken to cost 2 million rials per kilogram (about $2.85) and eggs to cost 150,000 rials each (around $0.21)?”
