Home Economy Why Is Everything Getting More Expensive in Iran Every Day?

Why Is Everything Getting More Expensive in Iran Every Day?

Monopolies, hoarding, and plundering are acts done by Iranian officials and companies, making the life of the people harder
Monopolies, hoarding, and plundering are acts done by Iranian officials and companies, making the life of the people harder

The President of the Union of Confectioners said: “With the outbreak of the coronavirus and a sharp drop in demand from citizens, sales of this class have dropped by up to 70%.”

The head of the Tehran Bird and Fish Sellers’ Union announced a 50 percent reduction in chicken meat following the outbreak of COVID-19 and a decrease in demand. Mehdi Yousefkhani said: “The decline in demand for chicken meat is due to the closure of restaurants, halls, hotels, parties and the prevention of the lack of cleaning and chipping of chicken in retail units.”

The head of the country’s livestock supply council announced the growing trend of light and heavy livestock population and said: “Red meat consumption has fallen by about 60 percent following the outbreak of the coronavirus and the closure of restaurants and halls.”

Dr. Zahra Abdollahi, Director General of the Nutrition Improvement Office of the Ministry of Health, said: “Reports from various parts of the country on the Network of Nutrition Experts show that fears of coronavirus have reduced the consumption of fruits and vegetables, and we are working to address this problem by educating them.”

The head of the union of real estate consultants announced a 58% decrease in housing transactions in Tehran. Mustafa Gholi Khosravi said: “From the beginning of April 2019 to 29 May 2019, the number of property purchase and sale contracts across the country was 56,780. In the same period of this year, it has decreased by 39% to 34,449 items. During the same period, the number of affidavits in Tehran shows that the capital’s sales contracts have fallen by 58 percent.”

All the news shows the decrease in consumption and the shrinking of the Iranian table. From housing and cars to meat and poultry and fruit and rice and dairy. The decline in people’s purchasing power has led to a decline in the purchase of all of these products, and the coronavirus wave has further caused most markets to stagnate.

However, as the Iranian government itself has said, in most of these markets, they have not reduced production. The housing market is saturated with a lot of houses and there are many vacant houses, for which their owners do not pay taxes.

The dairy industry has seen a sharp decline in exports in recent months due to corona conditions, and farmers say the livestock and meat production is very good due to this year’s heavy rains.

According to the laws of economics, when supply is high and demand is low, prices must fall. But in which market, apart from small and cross-sectional figures, have the prices decreased?

Perhaps a few percents drop in the car market, a few percent drop in housing prices, or a few percent drop in astronomical meat prices in recent weeks.

But the people are testifying that prices have risen sharply since last year, and there is no sign of cheapness. The question is why. When supply is high and the customer number and demand is low, why shouldn’t prices go down?

As Iran’s economists have said, two factors play a decisive role in keeping prices high and rising:

First, devaluation of the national currency. When the rial loses its value against other currencies of the world, it is natural that our purchasing power decreases. And as much as the government and its president are trying to solve this problem, but their efforts are in vain and with fanfare, this is not enforceable.

The second factor is the official and unofficial regime’s brokers, while people’s purchases and demand reduction to zero, with hoarding, do not allow that the prices fall. History has shown that the regime’s relevant organizations do not have the necessary power or will not deal with them because most of them are involved with them and stabilize the regime’s hoarding mafia, which has made the life for the people hard, even in such situations like the coronavirus outbreak they show no mercy. Because this brokerage system with huge capital, even if there is no purchase, they can raise the price.

In this situation, expecting cheapness in the future is not realistic. As long as the value of the national currency is falling and the brokerage system continues to operate despite the blows it has faced, the rise in prices will not stop.

 

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