30 Percent Poverty Rate Stabilized; One-Third of Iranians Unable to Meet Basic Needs

A report from the Research Center of the Iranian Parliament indicates that with the poverty rate in Iran stabilizing at over 30.1%, one-third of the country's citizens are unable to meet their basic needs. According to this report, the poverty rate in Iran has reached 30.1% of the population in the year 1402 (2023) and estimates from the Research Center suggest that this rate will remain at the current level in 1403 (2024). The poverty rate in Iran has significantly increased since 1397 (2018) and reached 31% in 1398 (2019). A look at the changes in the poverty rate over the past five years shows that this rate was only below 30% in 1401 (2022) by a margin of 0.3 percentage points. Experts say that due to the relative stability of the poverty rate in Iran over the past few years, it can be said that the 30% poverty rate has stabilized in the country. Stabilization of the poverty rate means that the percentage of the population living below the poverty line remains constant, and there will be no change in their living conditions at least in the short term. According to the latest studies published by the Research Center of the Parliament, the poverty gap (the income conditions of the poor relative to the poverty rate) in Iran has also reached 0.28. This index, which measures the income distance of the poor from the poverty line, explains whether the chances of escaping poverty have increased or decreased for the poor. In fact, the larger the poverty gap, the less chance the poor have of escaping poverty. This data shows that despite economic growth being one of the main antidotes to poverty growth in an economy, the poverty rate in Iran has increased while the country's economy experienced a 4.5% growth in 1402 (2023). A look at poverty indicators shows that the poverty gap decreased from 0.28 in 1401 to 0.27 in 1402. In other words, in 1401, the poor had an average income of about 72% of the poverty line, but in 1402 this figure increased to 73%. In fact, with the poverty line criteria of 1402, the poor had a higher income compared to 1401, but this income increase was minimal and insufficient for escaping poverty and reducing the poverty rate. Experts believe that the main roots of poverty expansion in Iran are macroeconomic instability and high, chronic inflation. Statistics indicate that in the past decade, due to the persistence of high inflation, the economic power of the people has significantly decreased each year, leading to an increase in the population of the poor. The main reason for the increase in the poverty rate in Iran, despite economic growth, is the high share of oil in economic growth and, in other words, the non-inclusive nature of economic growth in Iran. In other words, economic growth in 1402 was not inclusive, and low-income deciles did not benefit from this growth. According to Central Bank statistics, Iran's economic growth in 1402 was 4.5% including oil and 3.6% excluding oil. According to the Research Center's report on the increase in the poverty rate in Iran, government support policies in recent years have not been successful, and the cost of fulfilling subsidy commitments has only become a heavy burden on the budget. This center emphasized that policymakers should avoid inaction and delay and should adopt gradual reform policies to address some of the existing imbalances. The Research Center of the Parliament emphasized that appropriate solutions should be adopted for energy imbalances, banking imbalances, budget deficits, and price stabilization policies. The World Bank announced in 2018 that about 420,000 people in Iran live below the absolute poverty line. Additionally, according to the Research Center's report in 1397 (2018), between 23% to 40% of the total population of Iran lives below the poverty line.