Price Hikes Put Iran’s Middle Class In Dire Straits

Iran poverty

Rising consumer goods prices in less than six months has caused people especially the middle class to get poorer.

The high price of goods has also led to increasing the number of crimes such as robbery in society, according to the state media.

The state-run Salamat News recently published a report on the dire state of the economy and its effects on people’s lives.

“Some believe that the latest sanctions imposed by the United States are causes of increasing prices. It could be true in the case of foreign goods. But the uncontrolled increase in prices for Iranian goods and products, in a situation where the economic conditions of the people are not
good at all, has challenged the consumers,” the report said.

Price hikes are taking place while the people have not received any small pay raise, the report revealed.

Disappointed at any reduction on the prices, people have to cross out some items from their family’s basket.

Food prices increase by almost 50% in Iran

The price of food has increased by almost 50% in Iran reports Tasnim News Agency, affiliated with the Islamic Revolutionary Guards Corps (IRGC).

Tasnim also cited Iran’s Statistical Center, who said that the inflation rate for food, beverages, and tobacco grew by 11.4% compared to the previous month and put the current inflation rate of food at 47.5%.

Some 80% of the Iranian people live under the line of poverty, and the increased price of basic goods has resulted in a large number of protests and strikes. Workers, truck drivers, shop owners, teachers, and workers’ various sectors of society are demonstrating.

In fact, between October 26th and November 2nd, reports say 127 protests and strikes occurred in various Iranian cities — including the ongoing truck drivers’ strike which has spread to more than 75 cities and 25 provinces so far.

The government of Iranian President Rouhani has promised that the government would give the impoverished population a food basket adding that another basket would also be given to them before the Persian New Year. But food baskets don’t even begin solve the problem.

The price of basic goods has increased by 30 to 50% according to the head of the Parliament’s Economic Commission, and according to a member of the Parliament’s Agricultural Commission, the price of dairy products increases by the week. With these economic conditions, the poverty stricken majority of this population is in dire trouble.

The Jahane San’at state-run Website wrote, “The increase of the price of various types of basic commodities such as meat, rice, and protein products is ongoing.” They added, “A glance at the fruit and vegetable market also suggests that some sectors of the society can no longer afford fruit… Experts believe that given the trend of the rising price of goods on a weekly basis, the government support baskets cannot have much effect on the livelihoods of the people.”

“The economic policy of the country – not only in this government but previous governments as well – is not based on the defense of the poor in general. A country that has an economic policy based on defending the impoverished does not have millions of families living under the line of poverty,” according to the State-run Jomhouri-e Eslami Daily, who went even further and said that the Islamic Republic of Iran had no intention of supporting the poor.

80% decrease in workers’ purchasing power

Davoud Mirzaie, an economic expert close to the Iranian regime, recently said Iran’s workers have lost 80 percent of their purchasing power as the country’s currency, the rial, continues to plummet.
“The 19.5 percent wage increase has not shown itself in the workers’ lives, meaning the value of their wages in March 2018 is far below its value in March 2016. In other words, the workers’ purchasing power has decreased between 50 to 80 percent.

This is causing numerous problems for the families of the country’s workers,” he said in an interview with the state-run ISNA news agency on Wednesday.
“Such conditions have left the workers unable in providing for their basic needs. Therefore, labor unions have time and again called on the Ministry of Labor to see into this issue. Unfortunately, this remained unresolved,” he added.

Iran’s hyperinflation

While introducing four candidates for the Ministry of Economy, Iranian President Rouhani told the parliament that there was no “hyperinflation” and that the country’s economic situation was under control.

However, according to government officials and international reports, including the IMF’s recent report, inflation is at least 30% in Iran. The Supreme Labor Council calculations also indicate that the workers’ families Market Basket suffers from a 48% inflation rate.

On November 3, ILNA quoted an economist and university professor as saying that “Iran’s economy was turning into a disaster.”

“We should consider the current situation as hyperinflation, and we should have a worse-than-expected forecast if economic variables and our foreign relations do not change; given the sharp fall of the number of people below the line of poverty, especially those belonging to the working class, this indicates the presence of hyperinflation,” Morteza Afghah added.

“In addition to workers, employees who had a better livelihood, like teachers and nurses, are also falling below the poverty line,” he said.

The economist also acknowledged that the government was completely in the dark about what to do under current circumstances.