In a stark warning published by the state-run Arman Meli on February 12, Iran is teetering on the brink of an unprecedented economic catastrophe, with soaring inflation, a collapsing currency, and an increasingly impoverished population fueling widespread public discontent. Experts warn that the country’s economic crisis is spiraling out of control, as wages remain stagnant while the cost of living reaches unbearable levels.
Economic analyst Hamid Haji Esmaeili has issued a stark warning about the situation, stating, “Over the past two decades, due to relentless economic pressures and sanctions, the economic condition of Iranian citizens has steadily deteriorated. Not only has this affected the national economy, but structural inefficiencies in resource distribution have exacerbated the crisis.”
The Iranian rial has plummeted to nearly 1,000,000 per U.S. dollar, while inflation has eroded the purchasing power of ordinary citizens, rendering their wages inadequate for even the most basic necessities. Many lower-income Iranians are now unable to afford essential goods, while government efforts to alleviate financial hardships through cash handouts and rationed commodity packages have largely failed to stem the tide of poverty.
Esmaeili criticized the government’s continued reliance on cash subsidies, which he argued have failed to yield meaningful results. “For nearly two decades, direct cash subsidies have been the government’s main policy to support the people. However, with inflation soaring and prices spiraling out of control, these payments have lost their effectiveness. The number of people living in poverty has only increased,” he said.
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The situation is particularly dire for Iran’s working class. According to official statistics, the number of people seeking aid from government assistance programs has skyrocketed. “Data from the Imam Khomeini Relief Foundation and the Welfare Organization shows that the number of applicants for financial assistance has multiplied by seven to eight times in the past eight years alone. While three million people are currently receiving direct financial aid, at least eight million others are in similar distress but remain unassisted,” Esmaeili revealed.
The Iranian labor market is in crisis, with stagnant wages leaving millions struggling to survive. “The wage determination process in Iran has been fundamentally flawed for years,” Esmaeili said, calling for a complete overhaul of the system. He noted that annual 20% wage hikes—a common government response—have done little to counteract inflation. “These outdated and repetitive methods of setting wages no longer address the reality of people’s needs.
With nearly half of the population requiring financial aid to meet basic needs, Esmaeili emphasized that piecemeal solutions such as occasional handouts are “completely inadequate in the face of the country’s deepening economic crisis.”
One of the biggest economic burdens on Iranian households is housing costs, particularly for renters. Esmaeili argued that “beyond raising wages, the government must implement supportive policies such as rent subsidies and direct aid to tenants to ease the economic burden on families.”
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In addition to external sanctions, systemic corruption and inefficiencies in governance have severely damaged Iran’s economy. “One of the primary causes of Iran’s economic turmoil is the widespread mismanagement of resources,” Esmaeili pointed out. “The economy suffers from deeply entrenched corruption that has allowed wealth and opportunities to concentrate in the hands of a select few while leaving millions struggling.”
He called for a complete restructuring of the government’s economic policies, particularly in the distribution of state resources. “Many of Iran’s economic problems are not solely the result of external pressures. The lack of transparency and the culture of rent-seeking within the state have crippled the country’s ability to grow,” he added.
Iran’s economic woes have intensified in recent years due to corruption, political instability, and mismanagement. While state officials frequently cite foreign pressure as the main culprit, Esmaeili argues that internal policies are equally to blame. “If the government truly wants to address the economic crisis, it must first reform its own policies and eliminate the internal barriers to economic growth,” he urged.
As Iran’s economic turmoil deepens, social unrest continues to rise. Mass protests over wages, living conditions, and government corruption have become a regular occurrence in recent years. Esmaeili warned that “if urgent economic reforms are not implemented, the country will face an explosion of social and political instability.”