The continuous rise in food prices in recent months has not only placed growing pressure on households’ cost-of-living baskets and their limited monthly budgets but has also raised experts’ concerns about emerging signs of potential hyperinflation in Iran.
Official data released by the Central Bank of the Iranian regime show that Iran’s economy has faced an average annual inflation rate of 43% over the past eight years. It should be noted that these figures are provided by the regime’s own domestic institutions, which attempt to portray conditions more favorably than reality.
Calculating the cumulative increase in the general price level based on inflation rates over the past eight years shows that average prices of goods and services have risen by slightly more than 17 times, while the purchasing power of money has declined by 94%.
The Dollar Outpaces Inflation
Meanwhile, over the same period—from March 2018 to mid-December 2025—the dollar exchange rate rose from 47,730 rials to 1,300,000 rials, increasing by just over 27 times. As a result, the surge in the dollar’s value has been about 60% higher than the rise in inflation.
Unprecedented Pressure on Household Livelihoods
A comparison of commonly consumed food items by Iranian households shows that food price increases have exceeded even the 17-fold rise in the general price level, placing heavier pressure on household consumption. An examination of 20 selected food items between spring 2018 and autumn 2025 indicates that their prices, based on averages reported by the Statistical Center of Iran, have increased by an average of 20 times.
What Awaits the Economy Eight Years From Now?
If this trend continues and prices rise in the same way as over the past eight years, what should be expected?
Since inflation in Iran has experienced significant volatility over the past four decades, making precise forecasts is very difficult. However, by using average annual growth and the overall inflation trend, an approximate projection can be made based on the continuation of a linear trend.
In this simple linear model, the average growth rate of inflation over the past eight years is estimated at 3.23%, indicating an inflation rate of about 52.5% in 2033.
In other words, purchasing power over this period would decline by about 94%. For example, if in 2025 one could buy roughly 400 grams of ordinary Iranian rice with 1,000,000 rials, in 2033 that same amount of money would buy only about 23 grams—an amount effectively less than a small handful, clearly illustrating the potential emergence of hyperinflation in Iran’s economy.
The Future of the Dollar Exchange Rate
If the trend of the past eight years continues, the dollar exchange rate could rise another 27.25 times, which would place it at around 35 million rials in 2033.
If, in addition to high inflation, issues such as the government’s growing budget deficit, political risk, sanctions, restrictions on currency transfers, capital flight, and declining foreign investment remain unresolved, the exchange rate will continue to rise much faster than overall inflation, leading to an even sharper collapse in the rial’s purchasing power against the dollar.
Why Hyperinflation Is Likely in Iran
The reasons behind the likelihood of hyperinflation in Iran’s economy can be traced to the following factors:
- Budget deficits and monetary policies: Due to poor financial management and the printing of money without backing, inflation has become a chronic and long-term phenomenon.
- Sanctions and political tensions: Escalation in foreign policy tensions, economic sanctions, and international restrictions have had a severe impact on inflation and have sharply driven up the exchange rate.
- Inflationary expectations: Negative expectations among the public and economic actors about the future have pushed investments toward the dollar and non-rial assets. For example, over the past eight years, the price of a full gold coin—driven by inflationary expectations, the collapse of the rial, and rising global gold prices as a safe haven—has risen from 18,000,000 rials to 1,400,000,000 rials, increasing by more than 77 times.
Therefore, if the current trajectory continues, the general price level will rise astronomically. Under such conditions, wages and savings will no longer be sufficient to cover basic daily needs. In the event of hyperinflation, not only will purchasing power collapse and the middle class fall into poverty, but the formal economy will also stagnate, markets will face persistent instability, investment will decline, and the economy will enter a period of deep financial crisis.
