Tehran's press mourns Iran's economy... with worse to come

The data "reveals that the oil sector is the only sector that recorded growth of about 22% compared to the previous period", according to the radio programme.

Oil appears to be what Raisi relied on for his claims about economic growth.

Likewise, the International Monetary Fund relies on reports and data from official Iranian institutions.

It expected Iran's economy to grow by 3% last year, forecasts 2.5% this year, and 2% next year.

Raisi claimed that inflation was continuing its downward trend, from 55% at the beginning of the year to 35% at the end, with general inflation at around 40%.

"These claims come as inflation reached about 50% early last year and fell slightly in the middle of the year, but inflation remains one of Iran's biggest economic challenges," the radio report said.

It added that the ISC reported that food price inflation was between 22% and 93% in the last 12 months, raising concerns about economic conditions in the new Iranian year.

Loans for basics

In its 28 February issue, Sharq newspaper reported on the significant 93% rise in the price of meat and poultry compared to the previous year.

Iranians were "facing extremely poor living conditions, where applying for bank loans to purchase bananas, flour, milk, or even clothes is not unlikely in the near future," it said.

The newspaper noted that fish and shellfish were up 64%, fruit and nuts 51% higher, drinks and prepared foods were at 45%, while sweets, milk, cheese, and eggs had become 35% more expensive during the 12 months ending 19 February.

"Due to the serious decrease in domestic red meat production, red meat prices have increased significantly," it explained.

"The government of Ebrahim Raisi tried to reduce red meat prices by importing low-quality Brazilian meat but could not prevent the increase in prices."

The newspaper said it was "a bitter story about the significant decline in purchasing power in the country, where the inspector general of the Confederation of Iranian Workers Representatives said that the poverty line for a family of four is estimated to be at least 25 million tomans."

Government priorities

Iranian newspaper Tawssi'a Irani published a report titled 'No Increase in Production and Inflation Not Curbed' by Ramtin Movathagh in March last year.

This said the government had "met its economic targets and the country is overcoming the recession". A year on, many Iranians would beg to differ.

Morteza Ezzati, an associate professor at the Institute of Economic Research at Tarbiat Modares University in Tehran, believes that the government is "only concerned with itself and providing a budget for itself".

Economic growth and improving living standards are not government priorities, Ezati explained.

Rather, it focuses on expanding its influence and increasing its size at the expense of the private sector.

This is one of the country's serious economic challenges, he suggested.

"As long as the government continues on this path, it will not succeed in implementing effective economic policies that lead to growth, prosperity, and increased production."

Ezati added that Iran's economy is "affected by political, military, and security factors".

He said most of its economic problems are "caused by political and external challenges such as sanctions, Iran's failure to join the Financial Action Task Force, and military conflicts in the region, which also lead to economic instability".

Societal effects

A tightening of sanctions will only add to the woes, with inflation set to go higher, said Ezzati.

"The economy will improve if we succeed in resolving the challenges related to sanctions, financial transactions, and political relations."

Government policies did succeed at reducing inflation, he said, but these policies also led to reduced economic growth and further deepened the recession.

"Workers' wages deteriorated and banking facilities declined," he said.

Iranian economist Ibrahim Jamili said in a recent interview that the new year would be the most difficult year the economy had faced since the revolution.

His fear was that "exporters will not be able to obtain the currency they need to purchase basic goods, which will deal a major blow to production".

Economic journalist Azadeh Mohseni predicted that the dollar exchange rate would reach 75,000 tomans, with some expecting it to reach 100,000 tomans in the new year.

Journalist and social media activist Bahman Hedayati predicted "demonstrations and a mix of protest waves similar to those that occurred in November 2019 and 2022".

However, Hedayati said they would not lead to a result. "We must remember that the rise in the dollar's price and inflation may lead to waves of public discontent."

In need of green shoots

A report by the Tawssi'a Irani newspaper cited statements made by Hussein Rahimi, the commander of the Economic Security Police, regarding enemies' plans to destabilise the foreign exchange market.

"The ruling authority expects destabilisation of the foreign currency market and an increase in the extent of discontent to affect society," Rahimi was quoted as saying.

"Therefore, the exorbitant increase in foreign currency prices would be one of the reasons for protests in the new year."

The report added that a "rise in social tensions" was expected after Iran's parliament voted for a bill that imposes fines on women who do not wear the Islamic hijab.

Security forces may be deployed to public areas like subway stations to enforce the law, described as "a step that could escalate protest movements".

It also pointed out that Iran's brain drain would continue if the economy did not improve, adding that the country's middle class would keep shrinking.

The government has become accustomed to imposing higher taxes to cover budget deficits, leading to job cuts and increased pressure on producers and employers. Activists link this to social problems and higher suicide rates.

As the spring equinox, Nowruz marks the beginning of spring in the northern hemisphere. Iranians will be hoping for some green shoots from the economy.