Tehran, Iran – Soaring inflation is threatening food security for households across war-affected Iran, according to new figures, as diplomatic efforts to end the conflict initiated by the United States and Israel intensify.
“The people must realistically comprehend the country’s conditions and limitations,” President Masoud Pezeshkian stated to a group of officials who convened on Sunday to discuss the reconstruction of structures damaged or destroyed in US and Israeli attacks.
“It is natural that difficulties and problems exist on this path, but through the cooperation of the people and reliance on national cohesion, these problems can be resolved,” state media quoted him as saying.
Pezeshkian’s remarks followed the Statistical Center of Iran (SCI) reporting that Farvardin, the first month of the Persian calendar year ending April 20, registered an inflation rate of 73.5 percent compared to the same month last year. The SCI also indicated a five percent month-on-month increase in inflation for Farvardin.
The Central Bank of Iran, which uses a different methodology and data sets, reported a slightly lower inflation rate of 67 percent for Farvardin year-on-year, alongside a seven percent monthly increase.
While not identical, both figures point to a significantly accelerating pace for general inflation, which has been among the highest globally in recent years, consistently eroding the purchasing power of Iranians.
A Tehran resident informed Al Jazeera that she can no longer afford some items she could purchase just last month.
“And it’s not just me – I believe most people in society right now cannot afford many of the things they desire,” she added.
Data from these institutions also revealed that food inflation significantly surpasses headline inflation, compelling people to allocate an increasing portion of their diminishing salaries to basic necessities.
The SCI reported a staggering 115 percent food inflation rate for the first month of the year compared to the same period last year, with several staple items more than tripling in price.
Solid vegetable oil saw the highest increase at 375 percent, followed by liquid cooking oil at 308 percent; imported rice at 209 percent; Iranian rice at 173 percent; and chicken at 191 percent. The lowest price increases were for butter at 48 percent, followed by infant formula at 71 percent, and pasta at 75 percent.
Majid, a young man working at a liver kebab shop in the capital, stated that the eatery has raised prices three times in recent months.
“The price of liver has doubled. When we inquire with suppliers, they either cite shortages or claim sheep are being exported. Frankly, there’s no genuine oversight,” he commented.
The state-run Consumers and Producers Protection Organization issued a directive to 31 governors across Iran on Sunday, declaring new price hikes for cooking oil “illegal” and demanding they “must be returned to previous levels,” without specifying how officials expected this to occur amidst worsening economic conditions.
The nation’s struggling currency, the rial, has also hit new all-time lows over the past two weeks. On Sunday afternoon, it stood at approximately 1.77 million against the US dollar in Tehran’s open market after a slight recovery. A year ago, the rate was about 830,000 per US dollar.
Subsidies and ‘Enemy Plots’
The government’s response has included offering subsidies and coupons, while simultaneously attempting to crack down on practices like hoarding, which are believed to contribute to price increases.
However, this has not been accompanied by a clear macroeconomic stabilization package, as the US continues its naval blockade of Iranian ports.
As Iranian media reported on Sunday that Tehran had sent an official response to the proposed agreement text put forward by the US via mediator Pakistan, Pezeshkian stated, “If there is talk of negotiations, it does not imply surrender.”
The government distributes monthly cash subsidies and electronic vouchers for purchasing essential goods at selected stores, totaling less than $10 per person each month. Authorities are considering increasing this amount, but a significant budget crunch has complicated such efforts.
Pezeshkian and Central Bank chief Abdolnasser Hemmati have acknowledged the price increases, attributing them to the war that began in late February, while coordinating with the judiciary to combat price gouging and hoarding.
Several lawmakers in Iran’s hardline-dominated parliament, along with state television hosts and outlets affiliated with the Islamic Revolutionary Guard Corps (IRGC), have deemed the price surges suspicious. They have characterized the runaway prices as part of an “economic revenge” campaign by enemies who faced military failures.
“I want the people of Iran not to be deceived by enemy-orchestrated price hikes,” a guest on state television’s Ofogh network stated on Saturday. “Great things have transpired, and great things lie ahead. The economic achievements of the war are unparalleled by any other period.”
However, some of the economic hardship continues to be a direct consequence of a near-total internet shutdown, now imposed by Iranian authorities for the 72nd day.
Numerous officials within the government, internet infrastructure firms, telecommunication companies, and other state-linked organizations have emphasized their opposition to the tiered internet system currently being implemented. However, they assert no responsibility, as the blackout, expected to remain until the war concludes, was ordered by the Supreme National Security Council.
In the meantime, the combined impact of local mismanagement, Western sanctions, blockade, war, and the internet shutdown is severely pressuring individuals and businesses.
“The country’s startup ecosystem is dead; we are searching for a tombstone for it,” the Guild Association of Internet-based Businesses declared in a statement on Saturday.
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