As talks on Iran’s secretive nuclear program continue between world powers and the mullahs’ regime, many observers are wondering if a deal could help Iran’s struggling economy and improve people’s miserable lives?
Tehran is currently experiencing an unprecedented economic crisis. People’s purchasing power has fallen dramatically and, according to state media, Iranians can barely earn a living.
The Iranian Statistics Center announced on March 22 that the country’s inflation rate has reached 40.2%, marking the third time since 1979 that the inflation rate has exceeded 40%.
Years of mismanagement, corruption and incompetence have hampered Iran’s economy. The regime’s insistence on pursuing its regional adventurism has prompted sweeping US and European sanctions, adding further pressure on Iran’s already collapsing economy.
Iran’s inflation rate has risen rapidly in recent years due to the regime’s misguided economic policies. According to the state-run Bahar website March 26, the country’s liquidity has increased by “40%” in recent years.
Liquidity is a crucial indicator; his absence could harm the economy. Low liquidity seriously harms the production of countries with a relatively high production rate and could hamper their economic growth.
However, when the liquidity rate is not in line with other microeconomic factors such as the country’s gross domestic product (GDP), it leads to inflation.
“According to the central bank, Iran’s current liquidity is more than 450 trillion riyals, but the manufacturing sector has not absorbed this liquidity. Therefore, it has not helped the country’s economy,” state news agency IMNA wrote on March 23.
“Production has dropped significantly; Domestic production is therefore lower than the usual needs of society. Therefore, even with normal liquidity, supply is less than demand, so inflation is growing,” IMNA quoted Morteza Afghe, an Iranian economist. “When the liquidity growth rate is faster than GDP growth, it leads to inflation,” he said.
So why is Iran’s liquidity rising so fast?
To make up for its massive budget deficit, the Iranian regime began borrowing money from the central bank. Not having enough cash, the bank began printing banknotes, causing the liquidity rate to skyrocket.
“Governments have used tools like borrowing money from the central bank,” Afghe admitted, adding that “there is no other way. Over the years, the economic situation has deteriorated and people’s purchasing power has decreased.”
In his New Year’s address, Iranian regime President Ebrahim Raisi bluntly claimed that his government had reduced inflation, a claim that regime officials and state media were quick to scoff at.
“It has been seven months since Ebrahim Raisi came to power, but there has been no noticeable change,” state-run website Bahar wrote on March 26.
“Raisi’s government ended that [Persian New Year of] 1401, blaming the previous administration. He was just killing time,” Gholamali Jafarzadeh, the regime’s former MP, told Bahar News website.
Jafarzadeh ridiculed Raisi’s ridiculous order to “eradicate poverty” and acknowledged that “absolute poverty has increased and will increase. We will see skyrocketing prices, shrinking Iranian charts and government rhetoric and empty promises!”
He then referred to Raisi and his government’s claims of “economic achievements” and said, “How dare you insult people’s intellect? You are not blind. They see their tables and how their purchasing power has decreased.”
“Just tell people what you really did. People have nothing to eat!” Jafarzadeh confirmed.
It is absurd to think that Jafarzadeh cares about the needs of the Iranian people. He is shedding crocodile tears for the people amid fears of public anger at a collapsing economy. This fear was echoed by the regime’s so-called experts and the state media.
“People are trying to survive. How can we expect a population that is struggling to earn a living to argue with us? If someone sees his family starving, then he would come and try to reason with us,” Amanullah Gharaie-Moghadam, a sociologist, told the state-run Bahar website on March 18.
These comments make it easy to answer the original question: Would a nuclear deal affect the lives of the Iranian people? Would the country’s economy prosper? Let’s not forget that Iran’s first significant insurgency erupted in 2017, when the regime enjoyed sanctions relaxation and the Western powers provided Tehran with a cash lifeline. But people flocked to the streets because they couldn’t pay for the eggs!
Tehran will certainly step up efforts to pump more oil into the market once sanctions are lifted. Yet every cent is spent on the regime’s machinery of repression and terrorism. A windfall would not help Iran’s inefficient and corrupted economic infrastructure under the ruling theocracy.
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