Mehdi Dolatiyari watched with fear in recent months as the once affordable goods in his central Tehran supermarket fell out of reach of his customers.
Iranians who previously bought sacks of staple food items at the store now struggle to scrape together enough of a meal, as the country’s currency plunges to new lows against the dollar.
“Rice is very expensive,” said Dolatiyari, explaining that its price has almost doubled.
With US sanctions still throttling the economy, record-breaking inflation has hit ordinary Iranians where it hurt the most. Shocked shoppers are cutting meat and dairy out of their diets, buying less and less each month.
The Iranian rial is now about $270,000 – compared to 32,000 riyals for $1 at the time of Tehran’s 2015 nuclear deal with world powers. Due to this people’s salary and savings have ended.
Inflation has risen to 45%, the highest level since 1994, while food prices have risen by nearly 60%.
The reasons are many and overlapping. Among them: a sinking economy ravaged by years of sanctions linked to Iran’s nuclear program; Supply chain disruptions from the coronavirus pandemic; and a steady decline in local production.
GDP declined by nearly 60% from 2017 to 2020, the Chamber of Commerce reported last week, with its chief Gholamhossein Shafi describing the drop as a “serious warning for the future of Iran’s economy”.
Families now find their money increasingly worthless and must give up on foods once considered staples.
The prices of milk, curd and eggs have increased by almost 80 per cent as compared to a year ago. According to the Government Statistics Agency, the cost of vegetables and meat has increased by about 70%, and the cheapest basics such as bread and rice have increased by more than 50%.
“We see prices getting more and more expensive every day,” said Ojra Adlat, 63, a desperate shopper. “It’s terrible. How is that possible with such a low salary?”
Many Iranians say they are buying less than ever before.
“Now I can only buy groceries once a month,” said Ghana Khiabani, a mother of three in Tehran. “We have to pinch pennies.”
Severe sanctions were reimposed by the US in 2018 when then-President Donald Trump withdrew Washington from the historic nuclear deal, and hopes that world powers will find a way out for the deal have remained elusive.
Negotiations on the resumption of the accord in Vienna stalled in June, with no date set for their resumption before radical Iranian President Ibrahim Raisi took office.
Experts say Iran’s weak economy has suffered from mismanagement for decades, but sanctions, especially on the vital energy sector, which bar the government from selling crude overseas, have accelerated the decline.
Economist Murtaza Afghani said, “The main reasons for the current high inflation are internal, bureaucratic and executive inefficiencies.” “However, since we are dependent on crude oil sales … and on foreign currencies earned through oil revenues, we have become more vulnerable under sanctions.”
The dollar shortage has prompted the government to print more and more rials to pay its dues, stimulating the economy but driving up inflation.
As a result, many Iranians have been pushed into poverty. In the past year, the number of citizens living below the official poverty line – bringing home less than the equivalent of $46 a month – increased by nearly 40%, the government’s own figures show.
Another casualty of inflation could be the Iranian grocery store itself. Rising rents, low profit margins and dwindling customers, along with the explosion of major chains and online shopping, have left small and medium-sized stores struggling to survive, competing with the discounts on bulk purchases found at larger franchises. are unable to.
“It’s not economical to run a store now,” said 71-year-old Ali Donyai, who opened his grocery store in Tehran more than four decades ago.
At stake is not only the price of the goods, but the fate of thousands of cashiers, fruit vendors and meat-cutters. The head of Iran’s supermarket union, Saeed Derakhshani, warned that the layoffs would stir up the economy, another blow to those who can already buy only a few essentials.
“A retailer will not be able to survive,” Derakhshani said. “What will happen to their businesses, their families, and those who labor for them?”