Inflation in Iran

Inflation in Iran is considered one of the most important structural issues of the Iranian economy and has consistently remained above the global average in recent decades. Chronic inflation has had a direct impact on household purchasing power, investment, production, and economic growth, and is recognized as one of the key drivers of poverty and economic inequality in Iran. Consumer Price Index (CPI) data are mainly published by the Statistical Center of Iran and the Central Bank of Iran.

According to BBC Persian, the most fundamental structural cause of inflation in Iran’s economy is the government budget deficit. Traditionally, budget deficits have been financed through government borrowing from the Central Bank of Iran and money printing, a process that increases the monetary base and leads to rapid growth in liquidity, ultimately intensifying inflation.

Other factors affecting inflation include increased risk in productive activities, weak macroeconomic management, particularly mismanagement of the exchange rate, and depreciation of the national currency. Economic analysts consider chronic inflation a long-term phenomenon in Iran’s economy and describe it as one of the country’s most serious economic and social problems.

According to the Statistical Center of Iran, annual inflation reached 36.3% during July, August 2025. This rate varied among expenditure deciles from 35.8% (tenth decile) to 36.8% (first decile). In April, May of the same year, annual inflation was 37%, representing a 1.8 percentage-point decrease compared to March, April.

Based on international data, Iran ranks among the countries with the highest inflation rates. According to Trading Economics, inflation in Iran increased from 37.1% in March 2025 to 38.9% in April 2025.

The International Monetary Fund (IMF) projected Iran’s inflation rate in 2025 at approximately 43.3%, ranking Iran fourth globally after Venezuela, Sudan, and Zimbabwe.

By late 2025, inflation in Iran, driven by sharp increases in food prices, led to a nationwide food crisis. The collapse of the national currency, import shortages, drought, and reduced consumption prompted experts and politicians to warn of famine and social unrest.