The state-run media in Iran admitted on Saturday that the country is in an economic crisis and that the Iranian people hate the regime for this, which is why the Iranian people are taking part in a nationwide boycott of the elections.

The Ebtekar daily explained in an article on inflation that the price of basic food items has increased by 1.7 million tomans in just a few days.

It wrote: “Today, we can no longer see the effects of wage increases, the same wages that [officials]claimed should not be increased. Now even this small increase has disappeared. In one sentence, this situation could be described: ‘The livelihood security of wage earners is in serious danger.”

While the Aftab-e Yazd daily warned the authorities that the consequences of this crisis could really be the end of the current ruling theocracy, saying that the government has failed to “increase social tolerance” and the officials’ shortcomings, not least the skyrocketing prices of goods, has led to widespread protests.

It wrote: “Pay attention to the list of skyrocketing prices. The prices of various goods, both domestic and foreign, are rising each second, and no one is responsible… Put yourself in the position of a worker or retiree who has a statistic salary. Are these people motivated to have political participation? Even if a candidate gathers one hundred thousand people in a Clubhouse interview, how on earth would that help those whose earnings do not cover one portion of meat per month?”

The Donya-e Eghtesad spoke about the elections, saying that it doesn’t matter who becomes the next president because these economic crises are not solvable under the current ruling theocracy. They suggested that whoever the president is will only maintain the status quo and that this will cause more challenges, including inflation of 50% and zero growth.

The same day, the Javan daily wrote: “Over the past three decades, and especially the last eight years, the people’s faith, hope, beliefs, and trust in the system have been damaged. Thus, the political participation of the people has decreased. People are well aware of the fact that those behind the current situation can demand changes or change the situation in favour of the people.”

The Hamdeli daily advised that the system is lacking “popular legitimacy” and cannot form a “social movement” because it is unable to pull the wool over the eyes of the people with fake notions of reform and it cannot handle the current “political polarization”.

Another aspect of this economic crisis are the high prices of the people’s basic goods.

The state-run news agency ISNA on May 23 on this issue reported about a 70 percent of increase in the prices of six groups of food items. The report then added, that since the beginning of 2021, the increase of inflation in three indicators: monthly, annually and point-to-point has been triggered, while the point-to-point inflation, which indicates the increase in household spending compared to the same period last year, has reached 50 percent.

Oil prices have risen by 30 percent. The unbridled price of the basket of goods of Iranian households in other items is also on the rise. Other items which include these groups: ‘tea, coffee, cocoa, soft drinks and juices’ with an increase of 78.4 percent, ‘milk, cheese and eggs’ with an increase of 75.3 percent, ‘fish and shellfish’ with an increase of 73.1 percent, ‘red meat and poultry’ with an increase of 72.9 percent and finally the group ‘red, white meat and its products’ also increased by 72.9 percent.

In other goods, we can mention the 69.6 percent increase in the cost of ‘sugar, jam, honey, chocolate and sweets’ group, and home appliances and furniture also increased by 67.6 percent.

In terms of the annual inflation, the highest amount belongs to the transport group with 65.1 percent, oils and fats 61.3 percent and furniture and home appliances with 53.7 percent.

Iran’s statistics center said in a report that the annual inflation rate in May 2021 had reached 41 percent, which was an increase of 2.1 percent compared to the previous month.

In its report, the Statistics Center describes the record-breaking liquidity and inflation of 41 percent in the government of Rouhani as the ‘boiling point of inflation’ and wrote:

“Point inflation refers to the percentage change in the price index number compared to the same month last year. The point inflation rate in May 2021 reached 9.46 percent, meaning that the country’s households spent an average of 9.46 percent more than in May to buy a ‘set of identical goods and services.’”

The report also referred to another factor of inflation that takes place through banks, entitled ‘The creation of unruly money by banks, an important factor in causing inflation in Iran’ and wrote:

“Banks create a lot of fiat money on a daily basis, of course, and cause the country’s liquidity to increase continuously. In fact, the main reason for the significant increase in liquidity in Iran, which is a high figure compared to other countries, is the creation of fiat money. The most important loss resulting from this action of banks is the increase in inflation. In fact, it is the creation of unruly money by banks that has caused Iran’s liquidity growth to always be far ahead of economic growth and to create an inflation giant.” (State-run daily Vatan, May 23, 2021)

While President Hassan Rouhani falsely brags about his administration’s accomplishments, statistics show that Iran has experienced a disastrous decade in the economic aspect. Contrary to his claims about reforms, Rouhani refused to reform the flawed budget structure and banking system during his term in office.

In such circumstances, economists described the 2010s as a lost decade in Iran’s fiscal history, which severely affected Iranian families’ livelihood and drove millions of citizens below the poverty line.

“During the 2010s, we came into political and diplomatic field twice, and we defeated the enemy twice. It would not be a mistake to name this decade the decade of victory and national salvation. We were not wrong in saying that this decade was the decade of progress in the country and a leap in production and development. A great and dramatic job was done,” said Rouhani during the inauguration of petrochemical plans on April 15.

In response to Rouhani’s odd remarks, Mohammad Hadi Sobhanian, a Kharazmi University Scientific Board member, described the 2010s as “a lost decade in Iran’s economy.”

“During the 2010s, Iran’s economy experienced ebbs and flows. Therefore, regarding the major economic indicators, we can name the 2010s the lost decade of Iran’s economy,” Sobhanian added.

Official statistics show that the economic growth was averagely near zero in this decade, and society passed high inflation records. In 2019, Iran was among six countries with over-25-percent inflation.

At the time, Iran stood as the sixth state with the highest inflation after Venezuela, Zimbabwe, Argentina, South Sudan, and Sudan. Furthermore, the value of Iran’s national currency rial drastically dropped.

However, this is not the whole story. According to the March 2021 report of the Central Bank of Iran (CBI), the inflation rate has continued while the point-to-point inflation reached 50 percent.

In other words, given the country’s lack of economic growth and an unprecedented increase in the prices of people’s living expenditures, citizens are forced to shrink their product baskets each day.

According to the National Statistic Center, the per capita revenue of households decreased by lower than one-third in the 2010s. Meanwhile, the average consumption of the main foodstuff like rice, chicken, red meat, and fish have declined, and the poverty rate has risen.

Why Has Iran’s Economy Deteriorated?

There are enormous reasons for such circumstances. For instance, several economists believe that liquidity is the main reason for inflation. However, why has liquidity soared? Experts point to the government’s massive budget deficits.

Others reckon the unrestrained printing of banknotes by banks is the main reason. To counter banking disorders and to save their reputation, banks handed printing banknotes uncountably.

And a group of observers pointing to CBI’s wrong decisions as to the central dilemma. They explain that given the shortage in oil income, the government used the CBI’s reserved foreign exchange to compensate for its deficits. In this respect, the government’s debts to the CBI increased.

On the other hand, the majority of people had lost their capability to purchase foreign exchange from the government. Therefore, the government could not offset its costs and benefits. Retail businesses could not import raw materials and equipment. The production cycle did not run. The rial was devaluated more. And the country faced rampant liquidity.

Indeed, unsupported currency led the country’s financial system to the brink of collapse. According to the CBI’s report, the volume of liquidity reached 33.08 quadrillion rial [$1.323 trillion], Eghtesadnews.com reported on March 7.

On the other hand, the government constantly increases the prices of essential goods. No day goes by without major hikes in the prices of sugar, bread, rice, edible oil and other basic items. In a nutshell, officials are adding insult to the injuries of people who have nothing more to lose.