Three-minute read
As Iran ends 2025, the clearest through-line in regime-aligned reporting is that officials increasingly describe economic policy not in terms of welfare, but in terms of preventing unrest. The language of “social” and “security” fallout has become the regime’s shorthand for fear of public reaction—an implicit admission that stability is at risk and the street is the real opposition.
That anxiety surfaced openly in parliament. On December 24, 2025, a letter signed by 171 MPs warned that holding wage growth at 20%—while inflation is far higher—has pushed salaried households to a breaking point and could trigger “social and security crises.” This is not an opposition claim; it is insiders warning the state that it is manufacturing instability.
Budget credibility is also collapsing inside the system. Reporting citing the Majlis Research Center has discussed a large “unfinanced” deficit in 2025 and the risk of a wider gap if spending is not controlled—while the executive insists the next budget can meet targets without destabilizing shortfalls. Reports in late December 2025 also highlighted that the state is leaning harder on taxation and other domestic revenue channels, signaling that citizens are treated as the shock absorber.
#Iran faces a winter of crises: Deadly floods in the south kill at least seven, inflation drives up food and medicine costs, corruption diverts billions, amid elite infighting and blame game. https://t.co/WhuMjxTIp3
— NCRI-FAC (@iran_policy) December 21, 2025
Subsidies, fuel and a two-tier economy
The pressure is already being shifted onto households through welfare tightening. State media reporting has carried the Labor Minister’s remarks about removing subsidies for millions under revised criteria—an approach that may relieve the treasury but intensifies resentment, because it is perceived as opaque, arbitrary, and punitive in a high-inflation environment.
Fuel policy shows the same governing instinct: test how much pain society will tolerate, then manage the backlash. On December 25, Iranian outlets reported the rollout of imported “super” gasoline in Tehran through limited distribution, including mobile fuel tankers, sold outside the subsidized system. Reports noted the final consumer price was not clearly announced at rollout and estimated it could exceed 70,000 tomans per liter once costs and VAT are included—signaling a controlled move toward market pricing in a politically explosive sector.
This is not merely an energy story; it is a social stratification policy. A parallel market for premium fuel effectively formalizes a two-tier economy—subsidized scarcity for the majority and pay-to-access reliability for those with money—while the state tries to insulate itself from the political consequences by presenting the change as limited and “managed.”
The Sinking State: #Iran’s Winter of Converging Criseshttps://t.co/B7d40XIcxo
— NCRI-FAC (@iran_policy) December 18, 2025
State capacity failures: water, health, medicines
Even the regime’s president has described governance as a machine that makes problems worse. State reporting quoted Masoud Pezeshkian telling parliament that Iran’s water situation is “critical,” that most provinces face shortages, and that repeated laws and interventions have failed to reverse the trend. He described emergency transfers of water that reduce supply elsewhere—an admission that the state is not solving scarcity but reallocating it, creating new losers with every “fix.”
Public health statistics reported inside Iran reinforce the picture of preventable harm in a weakened state. Iran Online reported Health Ministry-linked figures describing about 150,000 burn incidents per year, 25,000–28,000 hospitalizations, and roughly 3,000 deaths, alongside severe workplace hazards.
Medicine supply is another high-risk trigger because it turns macro dysfunction into immediate, personal crisis. On December 26, 2025, MP Mohammad Jamalian warned in ILNA that drug shortages are “real,” and that if the Central Bank fails to provide foreign currency on time, shortages could expand to 400–500 items by year-end. He linked the crisis to delayed FX allocation, heavy sector debts, disrupted inputs, and heightened vulnerability for specialized and oncology medicines—precisely the categories that generate fear, anger, and political volatility when they vanish.
#Iran’s Currency Breaks Records as Water Crisis, Toxic Air and Parliamentary Infighting Signal a System Under Strainhttps://t.co/DckQnOHn0e
— NCRI-FAC (@iran_policy) December 8, 2025
Continued infighting
Inside the regime, the fear of public reaction is increasingly explicit. On December 24, MP Mohammad-Mehdi Shahriari urged top security bodies to “hear the people before it is too late,” linking inflation, pensioner hardship, and agricultural stress to potential destabilization. The framing is revealing: even when insiders acknowledge suffering, their dominant concern is the risk it poses to the clerical rule, not the obligation to protect citizens.
Put together, the year-end overview is not a single crisis but a convergence: a budget that insiders warn could create “security” shocks, welfare tightening that breeds resentment, fuel market segmentation that institutionalizes inequality, a water emergency the president says is worsening, health and safety harms on a mass scale, and medicine shortages tied to currency and mismanagement. The clerical state’s response pattern—extract, ration, deny, and manage backlash—keeps the system upright in the short term while increasing the probability that accumulated grievances ignite into the unrest the regime’s own officials keep signaling they fear.