With the U.S. government’s renewed maximum pressure campaign against the Iranian regime, Iran’s financial situation is deteriorating rapidly. As the regime loses more sources of revenue, its budget deficit has surged to an estimated one trillion tomans. This worsening crisis has sparked new disputes among regime officials, who fear the social consequences of the country’s dire economic conditions.
Internal Conflicts Over Economic Management
The latest sign of internal discord emerged on the evening of Wednesday, February 26, during a televised debate attended by four members of the regime’s parliament. The discussion revolved around the potential impeachment of Economy Minister Abdolnaser Hemmati. The session quickly devolved into shouting and accusations, as officials attempted to shift blame for the country’s economic chaos and escalating poverty without addressing the root causes of the crisis.
Supporters of the so-called reformist faction, which backs President Masoud Pezeshkian, have downplayed his failure to fulfill campaign promises. They argue that no president, under current circumstances, could resolve the country’s major crises, curb the growing budget deficit, or withstand Western economic sanctions. To justify their position, they point to the severe economic difficulties faced during Ebrahim Raisi’s presidency.
Conversely, Pezeshkian’s opponents—who advocate for the impeachment of several of his ministers—echo the claims of Supreme Leader Ali Khamenei. They assert that misguided government policies have exacerbated financial imbalances and increased government debt.
The Rial’s Free Fall and Mounting Economic Pressure
Between March 2024 and February 2025, the Iranian rial lost significant value, with the exchange rate climbing by approximately 33,000 tomans per U.S. dollar. This collapse, compounded by the death of former President Ebrahim Raisi, the defeats of the regime’s regional proxy forces, and the revival of U.S. economic pressure, has further crippled the Iranian economy.
Despite the regime’s increasingly desperate position, Khamenei remains steadfast in his aggressive foreign policies, refusing to acknowledge the economic crises that have resulted from his decisions. His continued insistence on militaristic and regional interventions has accelerated Iran’s path toward economic collapse.
Inflation, Shortages, and the Risk of Popular Uprising
A new wave of inflation has driven the prices of essential goods—such as food and medicine—up by 50% to 400% in just three months. Meanwhile, Iran faces severe shortages of gas and electricity, forcing the closure of industries, businesses, offices, schools, and universities. The crisis has alarmed some regime officials, who fear that worsening economic conditions could spark widespread social unrest.
Masoumeh Aghapour, an advisor to President Pezeshkian, openly acknowledged the regime’s currency crisis in a meeting with business leaders and importers. She stated:
“We have a problem with the currency issue, and this cannot be ignored. It is wrong to claim that Trump has no role—he has had a significant impact on our currency market, making the situation even more difficult in the past two weeks. We are now facing severe challenges in allocating foreign exchange and must settle the government’s outstanding debts for imported goods as soon as possible.”
However, just a week earlier, Pezeshkian himself dashed any lingering public hopes for economic improvement. Responding to growing frustration among citizens and industrialists, he indirectly admitted his inability to solve Iran’s deep-rooted economic issues:
“Do you think I have a magic box? No. Six months ago, I was just walking through parliament, and now I am the president. Everywhere we look, we see imbalances—in water, electricity, gas, money, land, schools, hospital beds… Demand is boundless, but our resources are finite.”
Government Incompetence and Public Anger
The regime’s financial mismanagement is becoming increasingly evident. Even the head of the Welfare Studies Center at the Ministry of Labor announced that the implementation of financial aid packages for low-income groups—which was supposed to begin on Friday—has been delayed due to “budgetary problems and inconsistencies.”
Meanwhile, worker and retiree protests are escalating. Reports from the state-run ILNA news agency indicate that at least 30 demonstrations have taken place across Iran in the past 72 hours, with participants demanding higher wages and denouncing the country’s worsening economic conditions.
Despite ILNA’s attempt to support the regime’s Economy Minister, the agency inadvertently admitted that the Ministry of Economy has little control over the nation’s financial direction:
“None of the reasons for the dollar’s rise include political variables or regional developments within the purview of the Ministry of Economy.”
This statement implicitly confirms that the final decisions regarding Iran’s economic future rest solely with Supreme Leader Khamenei.
A Bleak Future for the Iranian People
As the Iranian people approach the holy month of Ramadan and the Persian New Year (Nowruz), they face daily price hikes on basic necessities, with many struggling to put food on the table. The deepening economic crisis, coupled with growing infighting among regime officials, suggests that conditions will only worsen in the months ahead.
While ordinary Iranians suffer, regime leaders continue their power struggles, prioritizing their own financial gain over the well-being of the nation. With economic collapse looming and social unrest brewing, Iran’s ruling elite may soon find that their efforts to preserve power are no match for the collective anger of a population pushed to its breaking point.
