Iran entered the final weeks of Azar 1404 (mid-December 2025) grappling with a worsening economic crisis marked by rampant inflation, drastic reductions in state subsidies, and increasingly frank warnings from regime-affiliated institutions about social instability. Both official and semi-official sources report that households are struggling to afford basic necessities such as food, fuel, medicine, housing, and education, while senior clerics and government figures express concern over potential civil unrest. n nOne of the most pressing issues is uncontrolled food inflation. State-linked media acknowledge that prices for essential items have spiraled beyond containment, reducing household purchasing power and disrupting market stability. On December 13, raw milk prices jumped by 52%, pushing dairy products out of reach for many families. The Association of Dairy Industries attributed the surge to rising production costs, animal feed shortages, and an outbreak of foot-and-mouth disease, which collectively drove overall dairy prices up by approximately 75% in recent months. Tabnak, a site aligned with conservative factions, warned of “terrifying hyperinflation,” noting that certain dairy goods increased from around 50,000 to over 72,000 tomans within weeks. n nMeat, poultry, and rice prices are also climbing rapidly. The state-run poultry federation forecast a 10–15% rise in chicken costs by the end of Azar, citing elevated input expenses and difficulties accessing foreign currency for imported feed. n nThe financial strain has been intensified by the government’s decision to eliminate cash handouts for millions. On December 14, officials confirmed that nearly 6.8 million additional individuals had lost access to subsidies since the beginning of the year. The labor minister under President Masoud Pezeshkian stated that the total number of people no longer receiving support had reached between 14 and 15 million. n nThis rollback coincides with a sharp rise in living costs. According to the workers’ representative on the Supreme Labor Council, the monthly cost of a basic survival basket reached 33 million tomans. He emphasized that even holding multiple jobs no longer covers essential expenses, rendering items like meat, fruit, and dairy effectively unaffordable luxuries for many. n nFuel prices were also increased starting December 13, with gasoline purchased via fuel cards rising to 5,000 tomans per liter. Only limited monthly quotas remain available at lower rates of 1,500 and 3,000 tomans. State media admitted the hike was delayed by a week due to fears of public backlash—an implicit acknowledgment that authorities anticipated unrest but proceeded anyway amid a severe budget shortfall. n nAnalysts cite fiscal imbalance as the primary driver. Qods Online, a government-affiliated newspaper, cautioned that while higher fuel prices might offer temporary budget relief, they risk triggering widespread discontent, describing the situation as “a spark in a powder keg.” A parliament member noted that merely discussing the price change caused immediate spikes in gold and foreign exchange rates, highlighting extreme market fragility where prices for staples can fluctuate multiple times in a single day. n nThe healthcare system is similarly under strain. Pharmaceutical officials report that medicine prices have soared—some by as much as 700%—following the removal of preferential exchange rates. Hadi Ahmadi, a board member of the Pharmacists Association, said national drug reserves now cover less than two months of demand and predicted shortages for about 800 medications within three months. n nPatients face dire consequences, with many unable to complete prescriptions or forced to discontinue treatment. Younes Arab, head of the Thalassemia Association, revealed on December 10 that some families are considering organ sales to afford life-saving drugs for their children. n nEnvironmental and infrastructural challenges compound the crisis. Floods and heavy snowfall have affected at least 16 provinces, worsening conditions for vulnerable populations. Officials also warn that nearly all regions outside the Caspian coast are experiencing land subsidence, urging an immediate halt to groundwater extraction. n nThe depth of public distress was evident in Friday prayer sermons on December 12. While some clerics, such as Ahmad Alamolhoda in Mashhad, blamed external forces like “U.S. proxy soldiers in the economy,” they indirectly recognized the severity of the situation by referencing weekly yogurt price swings of 50,000 tomans. n nOther religious figures issued cautionary messages. In Birjand, Mohammad Mokhtari warned against “unconsidered actions,” stating that superficial policies cannot resolve deep-rooted problems and advising against promoting “false happiness” amid growing hardship. In Tehran, Mohammad Javad Haj Ali-Akbari urged citizens to resist “psychological insecurity”—a term widely interpreted as concern over public reaction to deteriorating economic conditions. n nThe cumulative effect underscores a system under visible stress, where economic mismanagement, external pressures, and internal policy shifts are converging to erode living standards and institutional credibility. n— news from National Council of Resistance of Iran – NCRI
— News Original —
Price Shocks, Subsidy Cuts, and Open Anxiety as Iran’s Economic Crisis Deepens
Four-minute read n nIran concluded the final days of Azar 1404 (mid-December 2025) facing a severe convergence of economic pressures, including runaway price increases, deep cuts to state subsidies, and unusually candid warnings from regime-linked institutions. Official and semi-official sources describe a society buckling under rising costs for essentials like food, fuel, medicine, education, and housing, while senior clerics and state officials openly express fears of widespread social unrest. n nFood Inflation Moves Beyond Control n nThe most immediate pressure point is food inflation, which state-affiliated media acknowledge has moved “out of control,” shrinking household food consumption and destabilizing markets. n nOn December 13, reports detailed a 52% surge in the price of raw milk, driving dairy products “out of people’s food baskets.” The Association of Dairy Industries reported that rising input costs and a drop in raw milk production—attributed partly to foot-and-mouth disease and animal feed shortages—have pushed overall dairy prices up by about 75% in recent months. A state-linked site, Tabnak, warned of “terrifying hyperinflation,” noting repeated price jumps that increased some dairy items from approximately 50,000 to more than 72,000 tomans in just weeks. n nPrice increases in essential goods like red meat, chicken, and rice are also surging. The state-run poultry federation predicted a 10–15% increase in chicken prices by the end of Azar, citing higher production costs and persistent difficulties in foreign-currency allocation for imported animal feed. n nSubsidy Cuts Hit Millions n nEconomic distress has been compounded by the government’s decision to sharply reduce state financial support for millions of citizens. On December 14, officials confirmed that cash subsidies for nearly 6.8 million people had been cut since the start of the year. Following earlier phased removals, the labor minister under Masoud Pezeshkian stated that the total number of people no longer receiving subsidies had reached 14–15 million. n nThese cuts are occurring as the cost of living rapidly accelerates. The workers’ representative on the Supreme Labor Council reported on December 14 that the monthly cost of a basic living basket for an average household reached 33 million tomans. He noted that even holding multiple jobs no longer allows workers to cover expenses, making staples like meat, chicken, fruit, and dairy effectively “luxury items” for many families. n nFuel Price Hike Under Security Shadow n nIn parallel with the removal of subsidies, the government moved ahead with a fuel price hike that shifts the cost of its fiscal crisis directly onto the public. Beginning December 13, gasoline purchased via station fuel cards was raised to 5,000 tomans per liter, while only limited monthly quotas remain at 1,500 and 3,000 tomans. State media acknowledged that the measure had been postponed for a week out of fear of its social consequences, an implicit admission that authorities anticipated public backlash but proceeded regardless, despite deep public distrust and already severe pressure on household incomes. n nOfficials and analysts cited a severe budget deficit and financial imbalances as the key drivers. The government newspaper Qods Online provided a stark assessment, warning that while higher fuel prices might offer short-term fiscal relief, the social consequences could be severe, noting that any price shock could act as “a spark in a powder keg.” A member of parliament noted that merely discussing the fuel price increase had already driven up gold and currency prices, reflecting acute market instability where prices for basic goods often fluctuate within the same day. n nMedicine Shortages and Health Risks n nThe crisis is also gravely affecting the healthcare sector. Pharmaceutical trade officials warned that drug prices have surged—in some cases by sevenfold—following the removal of preferential currency rates. Hadi Ahmadi, a board member of the Pharmacists Association, reported on December 14 that national drug reserves have dropped to less than two months, predicting shortages for approximately 800 medicines within three months. n nThe consequences for patients are dire, with many resorting to buying incomplete prescriptions or abandoning treatment altogether. Younes Arab, head of the Thalassemia Association, shared a shocking report on December 10 that some families are even discussing selling organs to afford life-saving medication for their children. n nInfrastructure Stress and Clerical Warnings n nThe economic pressure is exacerbated by infrastructure challenges and environmental shocks. Floods and blizzards have affected at least 16 provinces, adding strain to already struggling households. Furthermore, officials warned that nearly all regions outside the Caspian coast are experiencing land subsidence, urging an immediate halt to groundwater extraction. n nThe scale of this distress was reflected in the Friday prayer sermons broadcast on December 12. While some clerics, like Ahmad Alamolhoda in Mashhad, deflected responsibility by blaming “U.S. proxy soldiers in the economy,” they implicitly acknowledged the extreme instability—for example, citing yogurt prices that fluctuated by 50,000 tomans in a single week. n nOther leaders offered warnings. In Birjand, Mohammad Mokhtari cautioned against “unconsidered actions,” admitting that economic problems cannot be solved through cosmetic policies and warning against creating “false happiness” while public suffering deepens. In Tehran, Mohammad Javad Haj Ali-Akbari urged citizens to guard against “psychological insecurity”—a phrase widely understood as concern over public reaction to worsening economic conditions. n nA System Under Visible Strain