Iran Cash Transfers in a Time of War and Inflation
Iran has used cash transfers effectively to reach vulnerable households and stave off hunger during some of its most difficult years in recent memory. The practice of depositing monthly cash transfers into household accounts originated with the Subsidy Reform Law of 2010, which authorized the government to use the savings from eliminating energy and bread subsidies to compensate households for the resulting increase in living costs.
(more…)Why Iran Has Avoided Hyperinflation—And Why That May Be Changing?
The inflation report for the Iranian month of Ordibehesht (21 April to 20 May) showed a significant rise in prices: 8.5 percent according to the Central Bank and 8.8 percent according to the Statistical Center of Iran. As the figure showing three-month averages indicates, these are record monthly inflation rates, equivalent to annual rates in excess of 150 percent. More importantly, they interrupt a three-month decline in inflation (at least according to the SCI data), which had raised hopes that the cost-push inflation resulting from last fall’s removal of foreign-exchange subsidies for food and medicine had largely been absorbed.
(more…)Food Prices Surge in a Year Marked by War on Iran
Last week, the Statistical Center of Iran published its inflation report for Esfand (ending March 20), the final month of the Iranian year 1404. Despite the record-high inflation reported for the year, its most noteworthy fact is its release amid heavy bombing by the United States and Israel. It is a reminder of the resilience of the Iranian spirit—not only on the battlefield, but also in maintaining the state’s core functions on schedule. Perhaps more damaging than the destruction of the country’s physical capital is the erosion of its institutions, of which the production of accurate statistics—even when politically inconvenient—is essential and far harder to rebuild.
(more…)Iran’s currency crisis: what the rial does (and does not) tell us
The recent nationwide protests in Iran are the result of an accumulation of grievances, increasingly focused on what is commonly described as the “loss of value of the national currency.” This phrase is a familiar everyday lament among Iranians, who often equate the value of the rial—measured in U.S. dollars—with living standards. In doing so, they typically focus on the free-market exchange rate. Although this is a narrow market, it produces the most dramatic signal. The bulk of foreign exchange transactions take place at lower rates, but access to them is limited. The free-market rate, now around 1.3 million rials per dollar and averaging just under one million in the past month (see the blue line in Figure 1, left axis), is roughly 100 times its level when Obama-era sanctions took effect in late 2011.
(more…)Rethinking CPI, Food Prices, and Living Standards in Iran
A comment from an informed reader prompted me to re-examine my earlier post on living standards in 2024/25. The issue raised was whether it is adequate—or even accurate—to deflate household expenditures with the overall CPI, as reported by the Statistical Center of Iran (SCI), while ignoring the fact that food prices have risen faster than average prices.
(more…)Household Survey Data Reveal Modest Gains in Iran’s Living Standards for 2024/2025
The recently released microdata from Iran’s Household Expenditures and Income Survey (HEIS) offers valuable insights into household economic conditions across the country during the Iranian year ending on 20 March 2025 (Iranian year 1403 or 2024 for short). This post updates my earlier post on Iranian living standards in 2023.
(more…)The US-Israel war on Iran revives inflation fears
Kudos to the Statistical Center of Iran for not missing last month’s inflation report (Khordad = 21 May-20 June), despite the destruction caused by the Israeli bombing of Tehran. The attack struck at the heart of Tehran, a few blocks from SCI’s main building. Significantly, for those who habitually question Iran’s official statistics, the report is not flattering.
(more…)Iran’s GDP on the eve of the Israeli attack
I was planning to write an update on the state of Iran’s economy when Israel attacked Iran on June 13. For several days, it felt pointless to continue analyzing economic data — not because the data had become irrelevant, but because war had pushed the economy off center stage. Monitoring economic trends had mattered when Iran’s economic condition shaped its geopolitical posture. At that time, I saw value in challenging distorted narratives, those claiming that the economy was teetering on the brink of collapse — perhaps to justify preemptive military action — as well as those claiming Iran was thriving under sanctions, a blessing as some hardliners in Tehran liked to describe them.
(more…)Iran’s Investment Puzzle: Diverging Data, Converging Concerns
In a recent post, I discussed the rising standard of living in recent years and questioned how that could persist while the share of investment in GDP has been falling. Not only has it been falling, but to levels that seem inadequate for maintaining the capital stock—and with it, the quality of essential services like electricity. This is clearly unsustainable. If investment drops below 10 to 15 percent of GDP, the country would essentially be consuming by running down its capital—much like a household that sustains itself by selling off its furniture.
(more…)Sanctions and unequal regional growth in Iran
Regional equity is crucial in a centralized yet multi-ethnic country like Iran. In the language of empirical growth literature, convergence allows poorer regions to catch up, moving the country toward a more balanced standard of living. This process strengthens national unity by ensuring that no region is left behind. In contrast, divergent growth, where disparities widen over time, risks pulling regions apart and undermining national cohesion.
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Tyranny of numbers 
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