Warning from a Reformist Party about Collapse; Economy on the Brink of Crisis

The Iran Islamic Nation Union party issued a statement warning about the consequences of inflation and poor economic conditions, stating that "the crisis is one step away from the Iranian economy." The statement, released this past Saturday, indicates that the "crisis-ridden economy" of Iran and the "entangled complexities of the national economy" have reached a critical and alarming stage. It emphasizes that food inflation is on the verge of reaching triple digits, with citizens purchasing essential goods "at nearly double the price" of last year. The warning section of the statement notes that, based on official statistics, the performance of the Iranian economy shows that over the past forty-four years, the average inflation rate has been about 23 percent, and the average economic growth rate has been around 2 percent. Accordingly, it is reported that the liquidity amount in the year 57 (1978) was equivalent to 258 billion tomans, which reached 6,300 trillion tomans by the end of Esfand 1401 (March 2023). This means that the liquidity volume has increased 24,000 times over the past 44 years. Another point mentioned in the statement is the depreciation of the national currency, which has lost 6,000 times its value. The Iran Islamic Nation Union states that "the family economy is on the brink of fragility and collapse," and the disaster of sustained inflation rates above 40 percent over the past six years, alongside the lack of proportional increases in wages, has led to a decrease in absolute purchasing power in society and households, the expansion of poverty, increased inequality, and class divides. The party considers the naming of the year 1402 as "controlling inflation and increasing production" by Ali Khamenei as a result of the deepening crisis and the sounding of alarm bells, stating that the government has "fallen into a wrong path and instead of identifying and addressing the root causes of inflation, has resorted to a command economy and price suppression." At the end of the statement, it warns that the continuation of the current situation is "very dangerous" for Iranian society, cautioning that the existing conditions "could place Iranian society in the context of crises, turmoil, and widespread social protests." In this context, last week, following the distribution of food purchase vouchers to 25 million Iranians and a warning from the Deputy Minister of Welfare and Labor about "nutritional poverty" affecting 91 percent of the population, a journalist in Iran told Voice of America that the Islamic Republic has "no choice but to distribute coupons," and the situation is similar to that of the "Soviet Union in the years leading up to its collapse." This journalist and political economy analyst in Iran stated on Tuesday, June 30, to the Persian section of Voice of America: "It seems that the Iranian regime has no choice but to distribute food coupons, as official statistics show that poverty is significantly spreading in the country." According to this journalist inside Iran, "with the rapid spread of poverty," the Islamic Republic government "sees no other option but to distribute food item coupons," and the conditions have become "exactly like the situation experienced during the Iran-Iraq war or similar to the Soviet Union in the years leading up to its collapse." Livelihood protests have resumed since the beginning of the year 1402, with professional groups including retirees, workers, teachers, and employees from various industries repeatedly gathering and striking in protest against receiving low wages despite rising prices and inflation, and the continuous shrinking of their households' resources.