Recent statistics have shown sharp increases in housing rents and other essential costs as inflation soars amid Iran's worst economic crisis since the founding of the Islamic Republic.
Iran’s Statistics Center revealed that rental rates in urban areas rose by approximately 42% in the last 12 months compared to the same period last year. This rate significantly outpaced general inflation by 8.6 percentage points, despite a government-imposed cap of 25% on rent hikes announced in July.
Since July, following the implementation of a cap on rent increases, annual inflation in this sector, as reported by the Statistics Center, has been recorded at 41.4% in August, 41.7% in September, 41.8% in October, and now 41.7% in November.
Throughout these four months, rent inflation has exceeded general inflation. From September to November, rent inflation compared to general inflation has been reported to be higher by 6.6, 7.5, 8.2, and 8.6 percentage points, respectively.
The cost of renting has faced a significant surge since 2020, a combination of housing prices rising and the country's inflation rising since 2019. The government’s strategy of command pricing is not addressing the root causes of inflation, reported the financial newspaper Donya-e-Eqtesad.
Rental price inflation is part of a wider trend of rising costs in Iran, with recent moves by the government signaling potential price increases in gasoline and automobiles. It comes alongside rising energy costs and insufficient incomes.
The government recently authorized controversial measures to burn mazut in power plants to address the energy crisis, exacerbating environmental and public health concerns. Meanwhile, a resolution by the Economic Council mandates higher gas tariffs to curb overconsumption, further burdening households.
Simultaneously, domestic carmakers Iran Khodro and SAIPA announced price increases of up to 30% for their products, citing financial losses and heavy debts. Critics have called the car market one-sided, accusing the government of supporting monopolistic practices by banning imports.
The situation is reminiscent of the 2019 fuel price protests which saw widespread unrest and the deaths of hundreds of protesters. Economists warn that any rise in fuel prices could trigger inflationary shocks across the economy.
Hossein Raghfar, an economist at Al-Zahra University told Jamaran News: “Raising fuel prices without addressing systemic economic issues will harm everyone and increase tensions."
As the Iranian government struggles to manage rising costs and budget deficits, the consequences of inflation are felt acutely by ordinary citizens with one third of Iranians now living below the poverty line and basic goods like food becoming ever harder to afford.
Speaking during an open session of parliament on Sunday, Mohammad Bagher Ghalibaf criticized the resolution, accusing the United States and European nations of using Iran's nuclear program as a pretext for unjustified actions.
He said, "The Islamic Republic of Iran's reciprocal response to this political misuse of the Board of Governors was immediately put into action, and the deployment of a set of new and advanced centrifuges has begun".
The IAEA resolution, backed by major Western powers, expresses concerns over Iran’s lack of cooperation in addressing undeclared nuclear sites and calls for full compliance with its obligations under the Nuclear Non-Proliferation Treaty. Tehran, however, has dismissed these concerns and accused the agency of undermining trust through such decisions.
In a statement, France, Germany, the US and the UK criticized Iran’s response on Saturday, emphasizing the lack of credible peaceful rationale for expanding its nuclear program.
They warned that Tehran’s actions could deepen mistrust and further destabilize diplomatic efforts to address its nuclear ambitions.
“[We] note with serious concern Iran’s announcement that, instead of responding to the IAEA resolution with cooperation, it plans to respond with further expansion of its nuclear program in ways that have no credible peaceful rationale."
They also added that with this resolution, the IAEA Board emphasizes the essential and urgent need for Iran to resolve outstanding issues.
The western nations raised hope that Iran will use the time leading up to this report to provide the necessary information and cooperation to address these concerns. Last year, Iran banned a third of the IAEA's inspectors throwing relations between the two into a crisis.
“[This way,] the Agency is able to provide assurance that Iran’s program remains exclusively peaceful, and the Board can close consideration of this matter. If it does not, it will be important that the Board remain engaged to meet the challenge that Iran’s continued refusal to meet its NPT-related nuclear verification obligations would present, including to the credibility of the global IAEA safeguards regime.”
The development comes amid the prolonged deadlock over reviving the 2015 nuclear deal, which Iran claims the resolution jeopardizes.
The IAEA’s calls for compliance and Iran’s defiance highlight the growing divide between Tehran and Western nations. As both sides dig in, the possibility of a diplomatic resolution to the nuclear standoff appears increasingly tenuous.
Justifying his statement, Pezeshkian said, "With the leadership of Khamenei and the economic potential of our country, Iran does not deserve to lag behind its neighboring countries."
However, Iran has a bitter history of inviting foreign experts and economists to solve Iran's problems since the early 1910s.
Five years after Iran's 1905 Constitutional Revolution, the country's first parliament, determined to establish a Western-oriented democratic civil society in what was then known internationally as Persia, persuaded Mohammad Ali Shah—a ruler heavily influenced by Russia—to invite an economic adviser from the United States. Unlike Russia and Great Britain, the US had no political ambitions in Iran and showed no interest in exploiting its resources.
The 1905 revolutionaries had forced the Qajar Dynasty monarch Mozaffar ad-Din Shah to agree to the election of a parliament (Majles) and the opening up of a relatively free press as well as bringing about other reforms. But the king died within a few months and was replaced by Mohammad Ali Shah.
At the time, the United States was so uninvolved in regional ambitions that it initially declined Iran's request. However, under persistent pressure from the Iranians, the US government recommended William Morgan Shuster—a lawyer, civil servant, and publisher—who was ultimately appointed by the Iranian parliament as the Treasurer-General of Persia. Shuster served in this role from May to December 1911.
Shuster made every effort to stabilize Iran's chaotic and fragile economy, which had been severely impacted by the Qajar Shahs' debts to Imperial Russia and Great Britain. These two powers had effectively divided Iran into spheres of influence under the 1907 Anglo-Russian Convention. However, Shuster’s reforms, which sought to restore financial independence, challenged the authority of both Russia and Britain. In response, their agents in Iran created obstacles for him, and Russian forces subsequently occupied parts of northern Iran. They later accused Shuster of deploying Iranian gendarmes to collect taxes from people within the Russian-occupied territories.
Under mounting pressure from Russia and Britain, Shuster was ultimately forced to resign. He returned to the United States, where he wrote The Strangling of Persia, a book detailing the extensive influence and interference of Britain and Russia in Iran.
The Iranian government also appointed US-educated British lawyer and economist Arthur Millspaugh as its financial adviser, first from 1922 to 1927 and again from 1942 to 1945, to reform the country’s financial system. While his first tenure was relatively successful, his second was deemed a complete failure. The Iranian government attributed this failure to Millspaugh's "arrogance," though many observers pointed to factional infighting, political instability, and obstruction by opposition groups as key factors.
The factors mentioned—factional disputes, economic and political instability, obstructions by political rivals, and a deep-rooted xenophobia exacerbated under the Islamic Republic’s anti-West ideology—persist in modern Iran. Although 80 percent of the economy is controlled by the state or entities affiliated with the Islamic Republic’s establishment, factions thrive among these privileged groups ranging from clerics to the IRGC and influential families. Reforming the economy is hard to imagine in this non-competitive, non-transparent system.
Starting in the 1950s and continuing until the 1979 revolution, American and other international experts, advisors, and engineering specialists flocked to Iran to support the ambitious economic and industrial development spearheaded by Mohammad Reza Shah Pahlavi. By the 1970s, Iran was emerging as a regional industrial power and a major oil exporter.
In the unlikely event that Pezeshkian secures approval to hire international advisers, the challenges inherent in the Islamic Republic's economic and political system are likely to hinder their work.