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Iranian Economy Continues to Decline

Iranian Economy Continues to Decline

By Amir Taghati

At the beginning of last week, the first batch of U.S. sanctions took effect. Even before the sanctions were put in place, the Iranian economy was suffering. And the national currency – the rial – is losing its value rapidly.

The cost of living in Iran is rapidly increasing and the many millions of Iranians on a low income are really feeling the heat. It has been reported by Iran state media that the price for 30 eggs is hovering between 136,000 and 210,000 rials. Retailers are left with no option but to disregard the government imposed rate for essential products. The price of red meat has gone up to 600,000 rials per kilo – more than double the government rate. The price of poultry has gone up from 97,000 to 111,000 rials per kilo. In just less than a week, the cost of fruit has gone up by almost two-thirds and dairy, sugar and tea has risen by almost 20 per cent.

Furthermore, manufacturers in the automobile parts industry are saying that almost half a million Iranian workers will probably lose their employment because of the currency crisis.

For years, the people of Iran have been left with low wages and frequent price rises. This has meant that the people are getting poorer and poorer and more people are living below the poverty line. Millions of people in Iran earn around $100 per month (10 million rials) as it stands now. Twelve months ago this same 10 million rials was worth around $250.

The cost of housing in the capital city Tehran has gone up by almost 20 per cent on average, and between 40 and 60 per cent in certain areas of the city. Analysts and experts are saying that this is because people are protecting their money by investing in real-estate (and in dollars or gold).

The Auto Parts Manufacturers Association announced at the beginning of the week that car makers in the country are going to have to deal with a decline of around 80 per cent because of the currency crisis. It was announced that 14,000 workers had already lost their job in the industry. One of the company’s board members also said that if the government does provide cheap dollars, it will not be able to continue trading after September because it will not be able to acquire necessary imports.

Reports from Iran indicate that there is a major shortage of medication which has led to a sharp increase in its cost. Many Iranians are simply too poor to pay for necessary medication.

With the second set of sanctions due to take effect in November, the Iranian economy is set to face further blows. President Donald Trump has offered to meet with President Hassan Rouhani and has said that soon it will be left with no choice but to come to the negotiating table. Iran does not want to negotiate but it is facing intense pressure at home too. The people of Iran are adamant that the regime will be overthrown and they are working towards freedom, human rights and democracy.