Iran’s economic situation is deteriorating rapidly due to soaring inflation, systemic corruption, and massive capital flight, creating a crisis that increasingly threatens political stability. Official sources acknowledge that food prices are among the highest globally, while government officials are preparing for further fuel price increases and a major currency adjustment. Behind the data lies a growing public unease: a leadership facing the consequences of prolonged mismanagement, with rising risks that economic distress could ignite broader social unrest.
On November 9, 2025, state-affiliated publication Jahan-e San’at reported that year-on-year inflation for food and beverages surged to 64.3% in October, a 17-point increase over just four months. This places Iran second worldwide in food inflation, trailing only South Sudan. The outlet admitted that official figures likely understate the true burden on households, with experts noting that real-world price hikes exceed reported numbers. The pressure is evident in basic goods. On November 6, 2025, the Mashhad Bakers’ Union confirmed bread prices had risen by up to 15%, with vendors using secondary card machines to apply surcharges not yet integrated into the state’s Nanino subsidy system.
Fuel prices are also set for a significant overhaul. On November 7, MP Hossein Samsami revealed approval of a three-tier gasoline pricing model at 1,500, 3,000, and 5,000 tomans per liter, alongside plans to eliminate the preferential 28,500-toman exchange rate and unify the official rate near 100,000 tomans per dollar. The day before, Farhad Shahraki, deputy head of the Majles Energy Commission, stated that the fuel import budget had been fully depleted and the government lacked foreign currency to continue gasoline imports. He emphasized that no new parliamentary authorization was needed to raise prices, indicating that adjustments could proceed under existing legal frameworks. He also suggested that even subsidized fuel allocations at pumps might face price revisions.
These measures, introduced amid already extreme inflation, are expected to trigger another wave of price increases. The government appears to be implementing austerity indirectly—shifting fiscal shortfalls onto consumers while labeling the actions as economic reforms.
The financial sector also shows deep structural flaws. In a rare public critique during internal political disputes, pro-government economist Farshad Mohammadpour disclosed that Bank Iran Zamin has been functionally insolvent for years, though authorities have avoided formal insolvency declarations. He cited accumulated net losses of 14,222 billion tomans, with monthly losses of approximately 2,370 billion tomans—equivalent to 76 billion per day and over 3 billion per hour—placing depositors at significant risk. “People believe their savings are generating returns,” he noted, “but in reality, their assets are disappearing.” This exposes a banking system weakened by politically motivated lending, lack of transparency, and unchecked misconduct.
On November 8, 2025, an in-depth analysis of Iran’s pharmaceutical sector challenged official claims that sanctions are responsible for drug shortages and price spikes. The review emphasized that medicines are not under international sanctions, referencing a 2019 World Health Organization statement confirming this. Instead, domestic factors are the primary drivers: persistent high inflation, the removal of ultra-preferential exchange rates (which rose from 4,200 to over 28,500 tomans), growing government arrears to manufacturers and insurers, and inefficient subsidies that encourage smuggling.
The figures highlight the scale of the issue: $2.3 billion in drug imports during 2023/24; €11 billion allocated in the 2025/26 budget for medicines, raw materials, and medical supplies (down from €13.6 billion the previous year); and a reduction in drug import tariffs to just 1%. While consumption is rising—with 28 billion doses distributed in the first half of 2025/26—domestic production has declined. On November 1, 2025, authorities reported a smuggling case, and industry experts estimate around $450 million worth of subsidized and specialized medications are being illegally exported annually. Additionally, the Supreme Audit Court identified misallocation of health funds, with 20 trillion tomans from a $1 billion health budget diverted to university expenditures instead of supporting the pharmaceutical supply chain. The pattern reflects a system prioritizing elite benefits over public health.
Capital flight has reached unprecedented levels. According to a November 9 report, Iran experienced a record net capital outflow of nearly $9 billion in spring 2025. Total outflows for 2024 amounted to approximately $20.7 billion, with roughly $80 billion exiting the country between 2018 and 2024. A significant portion flows through trade networks controlled by state-linked and quasi-state entities, including economic arms of the IRGC. The same report noted a $3 billion year-on-year decline in oil and gas export revenue (falling to $15 billion), a $1 billion drop in non-oil exports (now below $11 billion), and a $2.8 billion services deficit. Despite maintaining a $6 billion trade surplus, this was effectively erased by the $9 billion capital exodus. Officials have publicly acknowledged struggling to secure even $1 billion for investment, underscoring the shrinking fiscal space.
Unemployment data also reveals deeper labor market weaknesses. While officials cite a 7.4% jobless rate for summer 2025, employment actually declined by 171,000, labor-force participation dropped, youth unemployment remained near 19%, and 40.3% of unemployed individuals hold university degrees—many relegated to low-paying service jobs unrelated to their training. Underemployment stands at 7.6%. In housing, conflicting reports cite anywhere from 500,000 to 2.8 million vacant homes, undermining coherent tax policy. Even the rollout of the “Bargh-e Man” app is misrepresented as a digital achievement, when in fact citizens use it primarily to monitor frequent power outages. These inconsistencies are not mere errors—they reflect deliberate efforts to shape public perception.
Collectively, these factors—food inflation at 64%, rising bread costs, impending fuel hikes, currency unification, a failing bank, pharmaceutical profiteering, and record capital flight—create a reinforcing cycle of hardship and eroding trust. The regime employs a dual narrative: promoting “reforms” and blaming external forces for public consumption, while quietly enforcing painful measures like price hikes, rationing, and financial repression. Leaders recognize that sudden shocks can spark unrest. Hence, austerity is being previewed while its political nature is denied. The danger is evident: another round of price increases, combined with strained household budgets and broken promises, could transform an economic crisis into a threat to national stability.
The evidence, drawn from the regime’s own data, points to a clear conclusion. A leadership that long profited from scarcity and manipulated economic indicators is now preparing the population for further hardship. It’s not just living costs that are rising—it’s the cost of maintaining power.
— news from National Council of Resistance of Iran – NCRI
— News Original —
Iran’s Regime Faces Mounting Economic Collapse as Prices Soar and Capital Flees
Four-minute read n nIran’s economy is buckling under compounded pressures of inflation, corruption, and capital flight, deepening a crisis that is now overtly political. State media themselves acknowledge food prices among the highest in the world, while officials quietly prepare new fuel hikes and a currency overhaul. Beneath the statistics lies a deeper anxiety: a ruling system confronting the consequences of years of neglect—and the risk that economic collapse could turn into social upheaval. n nOn November 9, 2025, state-run outlet Jahan-e San’at summarized new Center of Statistics figures: point-to-point inflation for food and beverages jumped to 64.3% in October 2025, up 17 percentage points in four months. By this measure, Iran ranks second globally for food inflation, after South Sudan. The paper concedes what households already know: “many experts believe official inflation figures are below lived reality.” The squeeze is visible in staples. In Mashhad, the bakers’ union confirmed on November 6, 2025, that bread prices rose up to 15%, with shops resorting to second card readers to add newly approved surcharges not yet programmed into the state’s “Nanino” system. n nFuel-price triage and a de facto currency reset n nFuel is next. On November 7, 2025, MP Hossein Samsami said a three-tier gasoline plan at 1,500 / 3,000 / 5,000 tomans had been approved, adding that leaders also agreed to scrap the 28,500-toman preferential rate and unify the exchange rate near 100,000 tomans per dollar. A day earlier, Farhad Shahraki, first deputy of the Majles Energy Commission, said the import budget for fuel is already exhausted, the state has no foreign currency to keep importing gasoline, and “the government needs no new permit from parliament” to raise prices—signaling that price action can proceed under existing law. He also hinted that “free cards” at pumps could see price changes. n nThese steps, arriving amid 64% food inflation, point to another inflationary wave—and to the regime’s austerity by stealth: offloading fiscal shortfalls onto consumers while presenting the move as “reform.” n nBanking rot in plain sight n nThe crisis is not only at the checkout line. In a striking admission amid factional infighting, pro-government economist Farshad Mohammadpour said that Bank Iran Zamin has been “legally bankrupt for years,” but authorities have avoided a formal declaration. He cited 14,222 billion tomans in accumulated net losses, hemorrhaging roughly 2,370 billion tomans per month—about 76 billion per day and over 3 billion per hour—with depositors bearing the risk. “People think their deposits are earning profit,” he said, “but in reality their assets are evaporating.” The revelation is a window into a banking system hollowed out by political lending, opacity and impunity. n nOn November 8, 2025, a detailed review of Iran’s pharmaceutical market rebutted officials who blame shortages and price spikes on sanctions. It noted that medicines are not sanctioned and cited a 2019 WHO statement to that effect; the real drivers are domestic: sustained high inflation, removal of ultra-preferential rates (from 4,200 to 28,500 tomans and beyond), rising state arrears to producers and insurers, and distorting subsidies that invite leakage and smuggling. n nThe numbers are stark: $2.3 billion of drug imports in 2023/24; €11 billion mandated in the 2025/26 budget specifically for medicines, inputs and consumables (down from €13.6 billion the previous year); and a cut in drug import tariffs to 1%. Consumption is rising—28 billion doses distributed in the first half of 2025/26—while production sagged; enforcement reported a smuggling case on November 1, 2025, and sector experts estimate ~$450 million in outbound drug smuggling, including subsidized and special-disease items. The Supreme Audit Court also flagged “sedimentation” of health funds, with 20 trillion tomans of a $1 billion allocation diverted to university budgets rather than financing the drug supply chain. The pattern is classic: rents first, patients last. n nRecord capital flight, falling oil revenue n nThe central bank’s latest quarterly shows an all-time record net capital outflow of nearly $9 billion in spring 2025, according to a November 9 analysis. Total capital flight in 2024 reached about $20.7 billion. Over 2018–2024, roughly $80 billion left the country; a chunk rides on trade channels dominated by state and quasi-state entities, including the IRGC’s economic arms. The same report notes a $3 billion year-on-year fall in oil-and-gas export revenue in spring 2025 (to $15 billion), a $1 billion drop in non-oil exports (to < $11 billion), and a services deficit of $2.8 billion—all while the economy still managed a $6 billion trade surplus that was effectively erased by the $9 billion capital outflow. Policymakers, meanwhile, publicly admit they are “haggling over $1 billion” for investment, a confession of shrinking fiscal room. n nMeanwhile, officials tout a 7.4% unemployment rate in summer 2025, but employment actually fell by 171,000, labor-force participation slipped, youth joblessness stayed near 19%, and 40.3% of the unemployed hold university degrees, many stuck in unrelated, low-pay service jobs. Underemployment sits at 7.6%. In housing, the state oscillates between 500,000 and 2.8 million “empty homes,” an incoherence that neuters taxation policy. Even in power cuts, uptake of the “Bargh-e Man” app is spun as digital success when in reality people install it to track rolling blackouts. These are not technical errors; they are tools to manage perception. n nA state bracing for backlash n nPut together, the story is not simply macroeconomic. Food at 64%, bread up, fuel hikes and FX unification pending, a bank effectively insolvent, drug rents and record capital flight form a feedback loop of pain and distrust. The two-language strategy is on display: promises of “reform” and external scapegoats for public consumption; quiet, coercive measures—price lifts, rationing, financial repression—for implementation. Officials know that sudden shocks can detonate. That is why the government now telegraphs austerity while denying its political character. The risk is clear: another price shock that collides with empty wallets and empty promises can translate economic crisis into a stability crisis. n nThe conclusion writes itself from the regime’s own data and declarations. A leadership that spent years monetizing scarcity and manipulating metrics is now preparing the public for more of both. It is not just the cost of living that is rising—it is the cost of rule.