Four-minute read
Iran concluded the final days of Azar 1404 (mid-December 2025) facing a severe convergence of economic pressures, including runaway price increases, deep cuts to state subsidies, and unusually candid warnings from regime-linked institutions. Official and semi-official sources describe a society buckling under rising costs for essentials like food, fuel, medicine, education, and housing, while senior clerics and state officials openly express fears of widespread social unrest.
Food Inflation Moves Beyond Control
The most immediate pressure point is food inflation, which state-affiliated media acknowledge has moved “out of control,” shrinking household food consumption and destabilizing markets.
On December 13, reports detailed a 52% surge in the price of raw milk, driving dairy products “out of people’s food baskets.” The Association of Dairy Industries reported that rising input costs and a drop in raw milk production—attributed partly to foot-and-mouth disease and animal feed shortages—have pushed overall dairy prices up by about 75% in recent months. A state-linked site, Tabnak, warned of “terrifying hyperinflation,” noting repeated price jumps that increased some dairy items from approximately 50,000 to more than 72,000 tomans in just weeks.
Price increases in essential goods like red meat, chicken, and rice are also surging. The state-run poultry federation predicted a 10–15% increase in chicken prices by the end of Azar, citing higher production costs and persistent difficulties in foreign-currency allocation for imported animal feed.
#Iran’s Three Tier Gasoline Plan Collides with Food Inflation and Health Strainhttps://t.co/6hQVa2aNv7
— NCRI-FAC (@iran_policy) December 13, 2025
Subsidy Cuts Hit Millions
Economic distress has been compounded by the government’s decision to sharply reduce state financial support for millions of citizens. On December 14, officials confirmed that cash subsidies for nearly 6.8 million people had been cut since the start of the year. Following earlier phased removals, the labor minister under Masoud Pezeshkian stated that the total number of people no longer receiving subsidies had reached 14–15 million.
These cuts are occurring as the cost of living rapidly accelerates. The workers’ representative on the Supreme Labor Council reported on December 14 that the monthly cost of a basic living basket for an average household reached 33 million tomans. He noted that even holding multiple jobs no longer allows workers to cover expenses, making staples like meat, chicken, fruit, and dairy effectively “luxury items” for many families.
Smog, Flu, and Fury: When #Iran’s Rulers Start Talking Like the Ruledhttps://t.co/rW28C0SdGr
— NCRI-FAC (@iran_policy) December 11, 2025
Fuel Price Hike Under Security Shadow
In parallel with the removal of subsidies, the government moved ahead with a fuel price hike that shifts the cost of its fiscal crisis directly onto the public. Beginning December 13, gasoline purchased via station fuel cards was raised to 5,000 tomans per liter, while only limited monthly quotas remain at 1,500 and 3,000 tomans. State media acknowledged that the measure had been postponed for a week out of fear of its social consequences, an implicit admission that authorities anticipated public backlash but proceeded regardless, despite deep public distrust and already severe pressure on household incomes.
Officials and analysts cited a severe budget deficit and financial imbalances as the key drivers. The government newspaper Qods Online provided a stark assessment, warning that while higher fuel prices might offer short-term fiscal relief, the social consequences could be severe, noting that any price shock could act as “a spark in a powder keg.” A member of parliament noted that merely discussing the fuel price increase had already driven up gold and currency prices, reflecting acute market instability where prices for basic goods often fluctuate within the same day.
#Iran’s Unraveling Promises Amid Escalating Economic and Public-Health Criseshttps://t.co/agGNVSzXIz
— NCRI-FAC (@iran_policy) December 9, 2025
Medicine Shortages and Health Risks
The crisis is also gravely affecting the healthcare sector. Pharmaceutical trade officials warned that drug prices have surged—in some cases by sevenfold—following the removal of preferential currency rates. Hadi Ahmadi, a board member of the Pharmacists Association, reported on December 14 that national drug reserves have dropped to less than two months, predicting shortages for approximately 800 medicines within three months.
The consequences for patients are dire, with many resorting to buying incomplete prescriptions or abandoning treatment altogether. Younes Arab, head of the Thalassemia Association, shared a shocking report on December 10 that some families are even discussing selling organs to afford life-saving medication for their children.
#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
Infrastructure Stress and Clerical Warnings
The economic pressure is exacerbated by infrastructure challenges and environmental shocks. Floods and blizzards have affected at least 16 provinces, adding strain to already struggling households. Furthermore, officials warned that nearly all regions outside the Caspian coast are experiencing land subsidence, urging an immediate halt to groundwater extraction.
The scale of this distress was reflected in the Friday prayer sermons broadcast on December 12. While some clerics, like Ahmad Alamolhoda in Mashhad, deflected responsibility by blaming “U.S. proxy soldiers in the economy,” they implicitly acknowledged the extreme instability—for example, citing yogurt prices that fluctuated by 50,000 tomans in a single week.
Other leaders offered warnings. In Birjand, Mohammad Mokhtari cautioned against “unconsidered actions,” admitting that economic problems cannot be solved through cosmetic policies and warning against creating “false happiness” while public suffering deepens. In Tehran, Mohammad Javad Haj Ali-Akbari urged citizens to guard against “psychological insecurity”—a phrase widely understood as concern over public reaction to worsening economic conditions.
#IranProtests: February 2025 Sees 216 Demonstrations Amid Economic and Political Crisishttps://t.co/3inZJSuYEy
— NCRI-FAC (@iran_policy) March 4, 2025
A System Under Visible Strain
Lacking viable solutions, the regime has fallen back on crisis management, repression, and intimidation to suppress dissent and social demands. Yet as the cost of daily survival rises toward a point where living itself becomes untenable, this strategy is pushing society toward a threshold where fear of poverty and deprivation outweighs fear of repression—an equation that historically precedes open revolt.