Inflation Warning for Proposed Budget Bill 1403; Inflation Exceeds 50 Percent

The worsening economic conditions in Iran is a topic that experts within the country are warning about, a warning that has been amplified by the former head of the 'Organization for Planning and Budget' regarding 'imaginary' revenues in the proposed budget bill for 1403 and the crossing of inflation beyond 50 percent. Hamid Mirzadeh wrote in the 'Etemad' newspaper that in the next year's budget, the government's general resources will show an increase of 18.2 percent and tax revenues will increase by 49.8 percent. Mirzadeh has expressed doubts about the realization of tax revenues, stating that the likelihood of achieving taxes next year is low and will exacerbate the budget deficit. The former head of the Organization for Planning and Budget considers the increase in money printing by the government to compensate for the budget deficit as the most likely action, and thus does not see inflation above 50 percent as far-fetched. The result of these events is the continued decline in the value of the national currency, ongoing economic recession, reduced purchasing power of the people, especially among wage earners, and an increase in the poverty line and decreased tolerance of low-income groups, which Mirzadeh believes may pave the way for economic and social turmoil. These concerns also exist among experts, who are warning about the economic future of the people and Iran. In this regard, an economist told the 'Fararu' website that with next year's budget, 'the purchasing power of a large segment of society will be completely reduced.' Morteza Afghah emphasized that next year will be 'a very difficult year for the people.' Mohammad Hossein Farhangi, a representative from Tabriz in the Islamic Consultative Assembly, also opposed the generalities of the 1403 budget bill, stating that the government has added 50 percent to the 60 percent increase in taxes this year, thus facing a 110 percent increase in taxes compared to 1401. Farhangi considered this action inflationary and disruptive to economic activities. All these issues come at a time when inflation in Iran has disrupted people's lives and the impact of reduced purchasing power is palpable across all sectors. For example, in the education sector, a review of statistics published by the Iranian Statistical Center shows that education inflation has broken its 12-year record and reached the highest level in these years. In another development, inflation of over 40 percent in recent years has reduced people's purchasing power and the quality of consumer goods; people's lifestyles have also been affected, leading media to report that a 'installment lifestyle' has emerged in Iran, with 'installment purchases even for food items.' A review of statistics published by the government’s Statistical Center shows that the annual inflation in Aban was 44.9 percent, which, contrary to officials' claims of a decrease, remains above 40 percent, and the possibility of inflation exceeding 50 percent has left the public and experts doubtful about the future. The likelihood of an increase in energy prices has strengthened; the rise in gasoline prices is not far off, and the parliament has shifted in favor of the government, granting the government the authority to set gasoline prices. The increase in pensions for retirees in 1403 has been reduced by 2 percent by the parliamentary commission. The parliament approved the generalities of the 1403 budget; taxes are tightening the grip on livelihoods. Inflation at 45 percent in Iran; the government will increase the salaries of employees and retirees in a staggered manner. The government has retreated in the 1403 budget; the equalization of retirees' salaries has been included in the budget.