In an unprecedented admission by the Iranian regime, the chief of staff to Iran’s supreme leader said that Iran’s economy is in trouble due to tougher sanctions.
“We are facing difficulties due to sanctions, but the government will find a way to overcome these problems,” Gholmhossein Mohammadi Golpayghani said in a rare candor.
His comments to Iranian media on Friday came amid grim data on the economic situation. The Central Bank of Iran (CBI) reported last month that inflation would be 52.3% in 2023, leading to widespread shortages, including of gasoline, despite the country’s major oil resources.
Sanctions have been imposed over Iran’s nuclear weapons program and support for terrorist organizations, but Supreme Leader Ayatollah Khamenei and his supporters are reluctant to admit they are straining the economy. Rather, they argue that sanctions are an opportunity for growth and development and can promote national cohesion.
“Weapons development is an example of turning sanctions into opportunities,” Khamenei said in a speech in April. “Sanctions cannot affect the Iranian people because Iran does not need external support.”
A sharp decline in the value of Iran’s currency has exacerbated inflationary pressures. For decades, the devaluation of the rial has pushed millions of Iranians into poverty.
The Islamic Republic’s recent foreign policy decisions have made things significantly more difficult for its economy. Tehran’s foreign exchange market saw an unprecedented surge in the first two weeks of April, with the dollar at one point reaching 700,000 rials as tensions between Iran and Israel worsened. In 1978, the rial was valued at 70 rials to the dollar.
Inflation has eroded the middle class, with tens of millions of people now living on about $200 a month, far less than it takes to maintain a middle-class lifestyle.