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As 2025 concludes, the clerical dictatorship of Iran is no longer merely navigating isolated economic or political hurdles; it has entered a state of structural polycrisis. Internal reports from state-run media portray a government struggling to provide basic functions as financial, ecological, and administrative systems fracture simultaneously.
The Currency Collapse and the Poverty Threshold
On December 24, reports from the capital indicated that the U.S. dollar surged past 136,400 Tomans in the open market, setting a historical record. This volatility is fueled by inflationary expectations and severe supply constraints, translating into a brutal cost-of-living crisis for the general population.
In a recent session of the Majlis, MP Hamidreza Azizi-Farsani estimated that if this trend continues, the population living in poverty in Iran will exceed 55 million people by the end of the fiscal year. The legislative body remains in high tension, with members criticizing the 2026 budget for a 20 percent wage increase that fails to match the 66 percent rise in food prices.
This economic tailspin is further complicated by the central bank’s inability to maintain liquidity. As exports fail to return sufficient foreign currency to the domestic system, the regime faces a structural deficit that traditional fiscal policies cannot bridge. The widening gap between official and open-market rates continues to fuel systemic corruption and drain the national treasury.
#Iran’s Crises Converge as Inflation, Shortages and Safety Failures Deepen https://t.co/QDa3Cc0NCz
— NCRI-FAC (@iran_policy) December 17, 2025
Seasonal Gasoline Indexing and the Bankrupt Treasury
In a desperate bid to manage a bankrupt treasury, the administration of Masoud Pezeshkian has moved to index fuel prices. A cabinet decree issued on December 22, established that fuel prices will be adjusted every three months based on refinery costs.
The implementation of this quarterly hike has raised concerns regarding its compounding effect on logistics. As inflation drives up the cost of refining, the retail price for gasoline will automatically climb every 90 days. This creates an inflationary spiral where fuel costs drive up food prices, ensuring a perpetual cycle of rising expenses for a public already reaching its breaking point.
Public reaction remains one of deep apprehension, as fuel prices are the most sensitive social indicator in Iran. Critics argue that the government is using basic mobility as a revenue stream to cover its budget deficit.
The Sinking State: #Iran’s Winter of Converging Criseshttps://t.co/B7d40XIcxo
— NCRI-FAC (@iran_policy) December 18, 2025
Infrastructure Decay and National Safety Risks
The human cost of systemic neglect was highlighted by Pezeshkian in a rare moment of admission on December 20. He compared Iran’s road fatality rate to a daily national catastrophe, stating that 17,000 deaths on the roads is equivalent to a passenger plane crashing every day. This crisis is rooted in a combination of decaying highways and the state-enforced monopoly of substandard car manufacturers.
Urban safety is also in a state of emergency, particularly in Tehran. Officials recently confirmed that 80,000 buildings in the capital are classified as unsafe. Despite these warnings, safety upgrades have stalled because the state has frozen renovation loans, leaving millions of residents in high-risk zones without the means to relocate.
The failure to manage industrial safety was underscored by recent labor protests in the mining sector. In eastern Iran, miners went on strike to protest months of unpaid wages and the lack of basic safety equipment in pits prone to collapse. These incidents highlight a pattern where the pursuit of resource extraction has led to a total breakdown in the duty of care toward the workforce.
Price Shocks, Subsidy Cuts, and Open Anxiety as #Iran’s Economic Crisis Deepenshttps://t.co/vXjLAbjVds
— NCRI-FAC (@iran_policy) December 14, 2025
Ecological Collapse and Energy Imbalance
Ecological failure has become a permanent feature of life in urban centers. Tehran’s air quality repeatedly hit “very unhealthy” levels this month, frequently placing it among the world’s most polluted cities. This crisis is exacerbated by record-breaking mazut burning in thermal power plants. To compensate for a massive natural gas deficit, the regime burns 40 million liters of high-sulfur fuel daily, poisoning millions to prevent blackouts.
Land subsidence has also become a critical threat to the capital’s stability. A recent sinkhole in Tehran’s Shahrak-e Valiasr district swallowed vehicles and damaged foundations, highlighting the catastrophic depletion of groundwater. These “silent earthquakes” pose a greater long-term risk to Tehran than conventional military threats.
Meanwhile, water scarcity has reached such an acute stage that the regime’s president and other authorities have resorted to persistent, performative alarmism. Competition for water between different regions has led to localized social friction and nearly paralyzed central agriculture. Without immediate investment in desalination, the regime faces mass internal displacement as rural areas become uninhabitable.
#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
Political Fragmentation and Institutionalized Corruption
The administrative failure of the regime is evidenced by institutionalized corruption and a growing rift between branches of power. The head of the Judiciary admitted on December 22 to a corruption scandal involving 900 rented business cards used to facilitate smuggling and evade taxes. This revelation exposes how state regulatory organs have been compromised, with billions in earnings diverted from the official economy.
Inside the Majlis, tension has reached a boiling point over the 2026 budget proposal. The sessions have been marked by threats of impeachment against the Central Bank governor and the Minister of Economy. There is a palpable fear among the officials that price hikes and economic stagnation will inevitably lead to a new wave of social uprisings that the security apparatus may struggle to contain.
Furthermore, there is a growing recognition of a terminal rupture between the state’s ideological framework and the younger generation. Judicial officials have voiced concerns that the youth have become alienated from the regime’s values. This demographic shift indicates that traditional methods of control are losing their efficacy, leaving the leadership in a state of strategic paralysis.
Dry Skies, Dirty Air, And A Sliding Rial: #Iran’s Crises Collide in Early Winterhttps://t.co/Du8KzRDcDn
— NCRI-FAC (@iran_policy) December 1, 2025
A Systemic Deadlock
The clerical dictatorship enters 2026 facing a terminal convergence of failures that appear beyond the scope of its current governance model. The economic collapse is deeply intertwined with ecological disasters, infrastructure decay, and a loss of administrative integrity. Each performative attempt to resolve one crisis only serves to accelerate the failure of another, creating a cycle of dysfunction.
Ultimately, the Iranian polycrisis represents a deadlock where the regime’s survival strategies conflict with the basic needs of its citizens. The question is no longer whether the Pezeshkian administration can or wants to undertake anything, but rather which localized spark will finally ignite the nationwide uprising that both the regime and the public now view as inevitable. The coming year will not be a test of policy, but a countdown to an inescapable confrontation between a hollowed-out state and a society that has nothing left to lose.