Iran's Economy on the Path to Food Rationing; Increased Dependence on Imports and a $3.7 Billion Currency Reserve Deficit

An economic newspaper reported, citing official statistics and statements from officials, a $3.7 billion deficit for importing essential goods, noting that dependence on imports of essential items has increased by 20% this year. The newspaper "Donya-e-Eqtesad" addressed the food supply crisis and the severe decline in people's purchasing power, quoting the head of the Parliament Research Center as saying, "We are in a situation where currency reserves have not only not increased but have decreased, and currently the country is facing a $3.7 billion currency deficit." Babak Negahdari emphasized that "if Trump becomes President of the United States in the future, we must be prepared for increased sanctions pressure and shocks to the asset market." The food supply crisis in Iran has reached a point where on January 7 of this year, an economic expert stated in a television program: "The average meat consumption of families in Iran is 8 kilograms, and in the bottom three deciles of society, it is less than 2 kilograms per year, while the global standard for this protein source is 12 kilograms per year." On the other hand, reports indicate that imports of essential goods have decreased by an average of 50% in the first eight months of the year, and in the area of red meat production, a 30% decrease occurred in November compared to the previous year. Kaveh Zargaran, head of the Iran Grain Association, declared the status of reserves for some essential goods critical in May of this year, stating that there is a possibility of shortages in 2023. The food supply crisis and its consequences in the near future, alongside the forecast of continued inflation above 40% in the country, have also sounded alarm bells for Ali Khamenei as the leader of the Islamic Republic. The website "Khabar Online" reported on December 12 that Ali Khamenei, in response to government reports, asked, "What has happened on the ground?" Khabar Online wrote that in simpler terms, the leader of the Islamic Republic is asking Ibrahim Raisi what has happened in practice beyond the reports. Analysts, based on observations and official statistics, believe that the current trend is a warning sign of a massive food supply crisis and shortages of food items in the market. The continuation of sanctions and non-developmental expenditures, including financial aid to proxy groups in the region, are among the factors limiting currency reserves in Iran. The price of the dollar is hitting records every day, and bread has also been rationed; Kourosh Aladin reports that a $5.3 billion decrease in Iran's deposits in foreign banks indicates that an "economic tsunami" is on the way. A newspaper report on bread rationing indicates that the government is on a path to angering the people. A research report shows that the budget of the Supreme Council of Islamic Seminaries is "five times" the subsidy for powdered milk and medicine. Bread prices continue to rise, with a 40% increase in 15 provinces.