Rising living costs in Iran are increasing pressure on families as inflation reaches levels unseen in decades.
The possible restart of the US-Israel war on Iran is adding to Iran's economic challenges. / Reuters Year-on-year inflation in Iran reached a level in May unseen since World War II, underlining the economic pain average Iranians face as Tehran worries about the war with Israel and the United States restarting.
A report on Monday by Iran's Central Bank represents the first official acknowledgement of what Iranians shopping, paying for a taxi or visiting a medical clinic already know: The rial currency is battered by the war and uncertainty around it resuming. Meanwhile, longtime problems of economic mismanagement and government corruption also appear to be dragging down Iran's oil-backed economy as it remains under a US naval blockade.
Economic pressure in the past has sparked nationwide protests, something the Iranian government has been trying to avoid since a crackdown on demonstrators in January killed over 7,000 people, according to activists' estimates. Experts note that new demonstrations could emerge if people find themselves priced out of feeding their families.
“I have no doubt that if Trump leaves ... most probably, we will see something like January by the end of summer because of the economic and social situations," analyst Mohsen Jalilvand said in a video published by Iran'sIran's Central Bank said the consumer price index, which measures a basket of goods and services, reached 77.2 percent in May compared to the year before. It added the rate is 8.5 percent higher than in April.
Inflation in daily and general needs — like medicine, taxi fares, tobacco and communication fees — rose 113.8 percent from the year before. Iran only saw worse inflation in 1942 during World War II, sparked by the British and Soviets invading the country and taking over its railway, disrupting food supplies. The lack of food, worsened by a poor harvest, sparked hyperinflation and a famine. Hunger and a typhus outbreak killed many.
A private economic think tank in Iran, the Bamdad Institute of Economic Studies, described the current figures as “an unprecedented rate since World War II. ” Iran's Central Bank did not acknowledge the significance of the figures. Air strikes this year have greatly damaged Iranian businesses and its oil industry.
Meanwhile, the US blockade has been targeting Iranian crude oil shipments trying to reach the international market, a key source of hard revenue. Tax revenues have been depressed by businesses struggling even after the fighting paused.
Iran still reviewing final US deal text, no response sent yet: reportIRGC says Tehran is 'ready for all scenarios' if war with US resumesIsrael kills 8 people including children in Lebanon despite Trump's ceasefire announcement“We will definitely have higher prices," Iranian President Masoud Pezeshkian warned in May.
"We are fighting and we must accept this hardship. ”In 2017 into 2018, rising food prices sparked demonstrations that killed over 20 people and saw hundreds arrested. An increase in government-subsidised gasoline prices caused protests that saw over 300 people reportedly killed.
Then came the protests over the rial at the start of this year, the most intense demonstrations to shake Iran since its 1979 revolution and the years that followed. IRGC says Tehran is 'ready for all scenarios' if war with US resumesIsrael kills 8 people including children in Lebanon despite Trump's ceasefire announcementIran still reviewing final US deal text, no response sent yet: reportUS state of Florida sues OpenAI over alleged ChatGPT harmsIran warns US will bear consequences of Israeli ceasefire breaches in LebanonRussia summons Lithuania envoy over 'desecration' of Soviet soldiers' gravesEU’s Kallas backs continued US-Iran talks, applauds Pakistan’s mediation efforts Turkish, Azerbaijani gas supply to Syria will support development, regional security: President Erdogan
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