Inflation hits 50% in Iran as war rattles economy

{"text":[[{"start":7.75,"text":"Iranians are bracing for a surge in prices and lay-offs as the US-Israeli war tips the Islamic republic’s already troubled economy into a new crisis."}],[{"start":17.35,"text":"Annual inflation, which was above 40 per cent before the war, rose to 50 per cent as of April 4, shortly before a fragile ceasefire went into effect, according to the central bank."}],[{"start":29.05,"text":"Consumers have continued to feel the pain in the weeks since the truce came into force, during which the US has blocked the Strait of Hormuz to try to disrupt Iranian trade."}],[{"start":39.75,"text":"One 56-year-old housewife in Tehran said the price of a block of cheese rose this week to IR6.7mn ($5.09) from IR5.2mn a week earlier. “It feels like everything has become far more expensive than before the war,” she said."}],[{"start":57.8,"text":"The prices of other essentials including rice, eggs and chicken have also risen in shops in Tehran. A new Peugeot 207, a popular car, has jumped from approximately IR18bn to IR25bn since the start of the war, according to multiple online car dealers. "}],[{"start":76.5,"text":"Local media have reported that authorities are expected to approve a 40 per cent increase in government-mandated cement prices."}],[{"start":null,"text":"

"}],[{"start":null,"text":""}],[{"start":84.6,"text":"Analysts expect the war will deepen the chasm between wage growth and inflation. Business consultant Siamak Ghassemi said in a post on social media that “any rise in wages less than twice” would not offset the increased cost of living."}],[{"start":99.1,"text":"Ghassemi told Iranians not to keep their savings in rials. The currency, which had remained largely stable during the war, hit a record low on Wednesday, trading at IR1.8mn to the dollar, further fuelling the public panic over declining purchasing power."}],[{"start":116.05,"text":"Some companies warn that they will have to lay off workers to survive. One small factory outside Tehran, which is dependent on petrochemicals, has let go of eight people, almost a third of its staff. "}],[{"start":128.2,"text":"Similarly, a clothing-related business owner in Tehran admitted he could no longer afford government-mandated wage rises. His sales were about IR2bn, while his costs stood at IR5bn in recent weeks. “This is not sustainable,” he said."}],[{"start":145.75,"text":"Over the weeks of war, the US and Israel bombed civilian infrastructure including roads and gas, petrochemical and steel factories, which employ tens of thousands of people, further setting back an economy weakened by years of sanctions, mismanagement and corruption."}],[{"start":163.5,"text":"While the ceasefire has brought the fighting to a halt, talks over a deal to end the conflict have stagnated, with Tehran insisting Washington lift its blockade of the strait before negotiations can continue."}],[{"start":176.6,"text":"Iranian politicians and analysts believe that, having endured high inflation and sanctions for decades, the Islamic republic will have a higher pain threshold than Washington and hope the US will eventually ease its demands."}],[{"start":189.6,"text":"But many Iranians fear this situation, which locals describe as akin to “no war, no peace”, will herald a new phase of stagnation and inflation. "}],[{"start":199.15,"text":"Even before the war, economic distress was a key source of unrest, triggering mass anti-regime protests in December and January, which ended in a brutal crackdown that killed thousands."}],[{"start":211.05,"text":"Iranian President Masoud Pezeshkian’s government has assured the public that its strategic food reserves are sufficient to survive the blockade and supermarket shelves remain stocked. It has also said land borders and northern port cities along the Caspian Sea are being used to bypass the US blockade of the strait."}],[{"start":229.60000000000002,"text":"During the protests, Iran introduced food coupons for almost all citizens to help mitigate the impact of rising food prices, with each person receiving IR10mn (approximately $7) per month. "}],[{"start":241.20000000000002,"text":"Although many workers have turned to social security benefits as economic pressures mount, media reports have portrayed these payments as insufficient to cover basic living expenses."}],[{"start":null,"text":""}],[{"start":252.35000000000002,"text":"Larger industries, such as gas, petrochemicals and steel, have avoided mass lay-offs but analysts have warned they are under significant pressure. Iran’s Etemaad newspaper estimated that steel production had fallen up to 30 per cent."}],[{"start":267.8,"text":"The country may also have to significantly reduce oil production if its storage facilities fill up and the blockade succeeds in choking off exports, according to analysts overseas."}],[{"start":279,"text":"Ali Khodaei, a member of the Supreme Labor Council, a government body, told local media that efforts to prevent further lay-offs were under way. Unemployment was at 7.6 per cent before the war. "}],[{"start":291.35,"text":"Iran’s deputy minister of labour announced on Wednesday that 191,000 workers, who lost their jobs due to the direct or indirect effects of the war, have applied for unemployment benefits."}],[{"start":304.05,"text":"Despite the grim outlook, Iranian government officials have vowed to resist what they characterise as the US’s “excessive demands”, including that Tehran halt uranium enrichment for up to 20 years and reopen the Strait of Hormuz. "}],[{"start":318.05,"text":"Iran insisted it would retain control of the strait and said it had a right to enrich uranium as a signatory to the nuclear non-proliferation treaty."}],[{"start":327.55,"text":"Fatemeh Mohajerani, the government’s spokesperson, said on Tuesday that the country had prepared for disruptions before the conflict began, without providing specifics."}],[{"start":337.05,"text":"“We’ve continued our sales, imports and exports even under the strain of the conflict,” said one steel industry entrepreneur, whose medium-sized company has traded through land borders and so far avoided laying off workers. "}],[{"start":350.05,"text":"“We don’t feel fragile yet, but we are worried about the continuation of this uncertain situation.”"}],[{"start":362.15000000000003,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777530258_7435.mp3"}