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Iranians Reel from Economic Mafia, Currency Collapse

Iranians Reel from Economic Mafia, Currency Collapse

Monday, 15 June, 2020 - 09:30
Sellers wearing masks in an Iranian fruit market (File photo: Reuters)

A soaring food inflation and growing prices of real estate and home appliances has struck Iran, raising fear among the people along with their concern on the coronavirus pandemic.

Purchasing power saw a significant decline as the prices of fruits and vegetables continued to increase by 30 to 40 percent.

Economic sources said inflation is caused mainly by the collapse of the currency, the impact of the coronavirus, lack of state monitoring, and the presence of an “economic mafia.”

However, the sources believe that western sanctions imposed on the country are directly to be blamed for Iran’s economic hardship.

Iranians have called on the government to take effective measures to solve the deteriorating economic crisis, which has forced them to limit their purchases to essentials goods.

Economic reports showed that the prices of household appliances rose 30 to 60 percent, causing a decline in sales, at a time when smuggled foreign goods saw a 100 percent increase.

The Statistics Center reported that 30 percent of Iranian families lost the ability to buy home appliances and resort to the flea market for their needs.

In addition, the housing market recorded a strong decline. Media reports indicated that some Iranians, who have failed to pay their mortgages or rent, are now living in tents.

The value of the Iranian rial also continued to drop against the dollar and euro.

Social media activists said the sudden imbalance in the market, deteriorating living conditions, and rising prices have increased suicide rates.

Recently, an employee of the Azadegan oil field in the southwest of the country, committed suicide, sparking widespread controversy and prompting the oil minister to open an investigation.

Earlier, the Iranian parliament summoned Minister of Economy Farhad Dejpasand for questioning on the economic situation. Lawmakers issued a constitutional warning to Iranian President Hassan Rouhani demanding measures to stop the increase in prices.

Donyae Eqtesad newspaper reported that Rouhani asked the Undersecretary of the Industry Ministry to ensure close supervision and urgent intervention to regulate and control prices of household appliances.

Last week, the President formed a taskforce that includes the ministers of economy and transportation, and the governor of the Central Bank. Rouhani tasked them along with his first deputy, Ezhag Jahangiri, with searching for solutions to the fast rise in home prices.

Economic observers believe that Rouhani should have acted even before the re-imposition of US sanctions on Iran to regulate the housing market.

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