People are tightening their belts in the face of the huge price hike

At his butcher’s shop in Tehran’s famous Molavi district, Ali skillfully cuts up a sheep’s carcass in front of dozens of shoppers whose only topic of conversation is accelerating inflation, and the staggering price hikes that are undermining her customers. “What can I tell you? My sales have almost halved. I’m a butcher and there are weeks when I don’t eat meat. Prices are going up,” he told AFP.

On the sidewalk, Ali Asghar, a 63-year-old retired government employee, hands a bag of meat cuts to him and his wife. “We used to buy a lot but that’s over. Everyone’s holding back, we’re all under pressure,” he says.

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According to figures circulated in the media, red meat prices have increased by 50%, chicken and milk prices have doubled, while cooking oil has quadrupled.

Iranians, who value good cuisine where meat goes well with rice, spices and other flavors, are now holding back on bread and chicken, even if the price of poultry and eggs doubled in mid-May as the subsidy ends. Bread that survived this inflation became the most popular food. Its price is stable after the government’s commitment that the price increase will not affect this commodity, as well as fuel and medicines.

The demand for bread is rising
At his traditional bakery in southern Tehran, Mojtaba, 29, says his sales have increased since President Raisi, who took office in August, made the promise. “We’re cooking extra because people are turning to bread, because they can’t buy rice, cooking oil and pasta. Some people now eat bread almost exclusively,” he explains. Knead the dough to get a new batch in the oven dug into the ground.
“The queues at the bakeries are getting longer,” Shadi, a housewife wearing the black chador, said bitterly.

A man buys bread at a bakery in Tehran, June 15, 2022. Photo AFP / ATTA KENARE

Iran is going through a severe economic crisis due in large part to the sanctions imposed by former US President Donald Trump during his unilateral withdrawal from the Iran nuclear deal in 2018. The crisis has led to a devaluation of the currency, to inflation exceeding 40% per capita. A year since 2018, according to experts.

The rial hit its lowest levels this week after the International Atomic Energy Agency issued a resolution against Iran, reducing the chances of a deal and lifting sanctions. On Sunday, it took 337,000 riyals to the dollar, an increase of 25 percent from the end of March and ten times more than 2017.

According to economic analyst Said Leylaz, “over the past four years, the country has faced the most severe inflation since World War II.” It accelerated after President Ibrahim Al-Raisi announced in mid-May a change in the subsidy system, which led to an increase in the prices of basic products such as flour, meat, eggs and olive oil.

Hundreds of Iranians demonstrated in several cities in recent weeks. These protest movements were added to other movements that have been going on for months in various sectors to obtain better salaries and raise the level of pensions.

Ministerial resignation
On Tuesday, Labor Minister Hojjatullah Abdulmalki resigned, citing his desire to see “improvement in services provided to the population,” according to government spokesman Ali Bahaduri Jahromi. But for reformist newspaper Etimad, his resignation comes after “the stinging criticism he received from pensioners”.

For Mr. Laylaz, two reasons explain the price hike: “the sharp increase in inflationary tendencies in the world” with the conflict in Ukraine, and “the beginning of massive economic reforms (…) in Iran which will inevitably lead to additional inflation”. For this expert, a former economic advisor to several Iranian presidents, many are indignant at the abolition of the subsidized exchange rate, in force since 2018, which allowed the import of essential products, at an affordable price, such as wheat, cooking oil and medicinal materials. equipment. But for Mr. Leilas, this fallback from the exchange rate was inevitable, especially since talks with major powers over nuclear power have yet to produce an agreement to lift sanctions. “If Iran wanted to maintain the preferential price as in previous years, we would need $22 billion this year,” he said.

In his butcher’s shop in Tehran’s famous Molavi district, Ali skillfully cuts up a sheep’s carcass in front of dozens of clients whose only topic of conversation is accelerating inflation. Salt and pepper, he looks grizzly when he talks about the dizzying price hike that is undermining his customers. “What can I tell you? My sales have almost halved. I…

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