For the past four decades, the inflation rates in Iran have been in double-digit figures, which has resulted in the destruction of the country’s economic and social structures, leaving many Iranian citizens living in poverty.
The state-run Vatan-e Emrooz daily indicated that the volume of liquidity in Iran has exceeded 39,000 trillion rials (around $140 billion) according to the latest report from the Central Bank, which equates to a 40 percent increase over the past year alone.
This amount of liquidity has pushed up the prices of items that people need, and many food items such as red meat, chicken, and even eggs and milk, and other dairy products have become too expensive for many across the country.
A report in the Hamdeli daily on October 10, stated that due to the skyrocketing prices, people are struggling to afford to buy Iranian-made home appliances to store and prepare food. The president of the Home Appliance Traders’ Union noted that Iranian-made refrigerators are currently between 240 and 250 million rials (between $860 and $893), while stoves are priced over 70 million rials (around $250).
In addition to the role of liquidity and other economic problems in increasing inflation and high prices, government-linked firms also play a major role in skyrocketing prices.
The state-run Setare Sobh daily wrote in their publication that the price of many staple food items has increased by 100 percent within the last year. The highest price increase is for vegetable oil which sits at a whopping 141%, with the increase for carrots not far behind at 140%. Even items such as milk and eggs have seen an 83% and a 77% increase respectively.
Setare Sobh quoted Ali Ghanbari, a government expert, who said, “General inflation and corporations’ competition over prices, currency fluctuations, and national currency depreciation are the most important reasons behind the rise prices of the people’s basic commodities.”
The fact is that in order to deal with this critical situation, the government must first stop printing unsupported banknotes, divert loose capital to production, which has become very difficult and even impossible.
One of the other ways to prevent inflation from rising any higher is to stabilize the foreign exchange market. The government has been raising the price of foreign exchange deliberately to compensate for their budget deficit as confirmed by Mahmoud Vaezi, the chief of staff under the former president Hassan Rouhani.
The regime’s corruption is the cause of the current situation in Iran, and there are no attempts being made to rectify the crisis. As a result, society is growing more and more restless, and with nothing to lose, they are continuing to protest across the country despite the threat of brutal crackdowns from the mullahs and their security forces.
The regime is playing with duplicitous claims about fighting corruption. And it is only a matter of time before the contraption it has created blows up in its own face.