The Iranian year 1404 (starting on March 21) begins with a widespread consensus among Iranians of all political beliefs that the country is in an economic crisis. This crisis indicates an even grimmer future. One of the signs of this is a budget deficit of 8,700 trillion rials (approximately $8.7 billion) and an inflation rate exceeding 40%.
Continued Inflation Growth
According to the Iranian regime’s Statistics Center, the price of goods and services used by the public has increased by 35% compared to last year. The situation for workers’ wages is even more painful, as their value has dropped by nearly 50% over the past 14 years.
“The minimum dollar wage of workers, which was nearly $300 in 2012, has dropped to below $150 in 2025, nearly halving. In other words, Iranian workers’ purchasing power has drastically declined during this period.” (State-run EcoIran, March 29, 2025)
Last year was, in fact, the year of economic bankruptcy for the Iranian regime. The financial imbalance, particularly in the energy sector, led to the shutdown of industries, schools, and even government offices.
Continuous Money Printing by the Government
Mahdi Pazouki, a government-affiliated economist, stated:
“The most critical economic problem Iran faced in 2024 was economic instability. The key indicator of this instability is rising inflation. Another issue is the budget deficit. When government expenditures exceed revenues, it results in a deficit, which in turn fuels inflation. When the Central Bank is ordered to print money, it leads to increased liquidity.”
Governments’ Addiction to Raiding the National Development Fund
The administration of Masoud Pezeshkian, the current president of the Iranian regime, like previous governments, turns to the National Development Fund whenever it fails in economic policies.
The electronic voucher program, which had been suspended since early last year, will now be reinstated under a new cabinet decision, financed by a $1 billion withdrawal from the National Development Fund.
The Banks of Iran: Serving the Economy or Corrupt Capitalism?
Electronic vouchers will provide low-income groups (bottom three deciles) with 5 million rials per person (~$5) and middle-income groups (deciles 4–7) with 3.5 million rials per person (~$3.5) to purchase 11 essential goods.
The voucher program covers meat, chicken, eggs, rice, pasta, cooking oil, milk, cheese, yogurt, legumes, sugar, and sweeteners.
Billion-Dollar Withdrawals from the Fund
In September 2024, at the start of Pezeshkian’s presidency, the Iranian regime’s supreme leader, Ali Khamenei, approved his request to withdraw $8 billion from the fund to settle government debts to wheat farmers, nurses, and truck drivers.
More recently, a $17 billion withdrawal from the fund was approved to finance the South Pars gas pressure-boosting project and to channel funds to the Khatam al-Anbiya Construction Headquarters (a branch of the Islamic Revolutionary Guard Corps) and several front companies.
Economy in Crisis, Without an Economy Minister!
Meanwhile, the Minister of Economy has been impeached and removed from office.
“An economic expert stated: One of the major challenges facing businesses is the performance of the Industry Minister, who, due to foreign currency shortages, has restricted currency allocations. This situation has led to reduced production, rising prices, and increased inflation.” (State-affiliated newspaper Eghtesad Online, March 27, 2025)
Iran Heading Towards More Crises
The Iranian’s problems extend far beyond the economy. Weak foreign policy, fears of potential wars, uncertainty over succession for the regime’sSupreme Leader, and the possibility of popular uprisings have made the Persian year 1404 (March 2025-March 2026) a year of crisis and potentially the beginning of the regime’s downfall.
