Iran’s 45% minimum wage increase faces criticism over inflation gap

The 32-year-old Sunni Muslim, released from the detention center in June after judges ruled that being confined was bad for his mental health, was spared deportation to Iran in January.

Named only as D8 in court documents, he entered Britain illegally twice, in 2017 and 2021.

In July 2022, the Home Office rejected his asylum application on national security grounds, saying that he had an Islamist mindset and maintained support for the Islamic State.

He has now been given five years’ leave to remain as a refugee in the system, which safeguards human rights before national security.

He is the latest case of many to be waived deportation on human rights grounds, most citing the right to a family life under the European Convention on Human Rights (ECHR), which limits the British government’s attempts to remove illegal migrants in spite of the UK leaving Europe.

In a hearing in January, the judges in the case said: “Drawing the threads together, the secretary of state has concluded that D8 is a danger to the national security of the United Kingdom."

"It is inherent in that conclusion, which the secretary of state was entitled to reach, that he represents a real and serious danger.”

The judges, however, said that if D8 were returned to Iran “his life would be put at risk” and he would be exposed to “a real risk of torture or other inhuman or degrading treatment”, likely due to his being a minority Sunni Muslim, and Iran’s own battle against Islamic State extremism on its own soil.

Mojtaba Ghahramani, head of the Hormozgan Province Judiciary, said that the unauthorized diversions were found on a natural gas pipeline between the villages of Sar-Rig and Isin.

"Technical and police measures have been initiated to identify the perpetrators of this fuel theft," Ghahramani said, adding that some of the taps appeared to be newly installed.

Ghahramani repeated the judiciary's past warnings to the Ministry of Petroleum about the need for enhanced monitoring and the installation of advanced metering systems.

The discovery follows heightened scrutiny of fuel smuggling in Iran, with President Masoud Pezeshkian recently decrying the daily loss of 20 to 30 million liters of fuel as a catastrophe amid a nationwide energy crisis.

Economists and officials have increasingly pointed to systemic, large-scale operations, rather than small-time smugglers, as the primary drivers of the illicit trade.

Estimates suggest that up to 50 million liters of fuel may be smuggled out of Iran daily, raising questions about high-level complicity.

"This volume of smuggling cannot be the work of small-time smugglers in border regions. It is definitely done by government entities," economist Hossein Raghfar told local media.

The sheer scale of the operation, involving potentially thousands of trucks or large tankers, has led experts to suspect the involvement of organized networks and even elements within the Islamic Revolutionary Guard Corps (IRGC).

The IRGC controls a significant portion of the country’s transportation networks and border crossings, which, according to economic journalist Reza Gheibi, makes it difficult to imagine that such large volumes of fuel could be smuggled out of the country without the IRGC’s knowledge or involvement.

The lucrative nature of fuel smuggling, driven by the disparity between subsidized domestic prices and higher international rates, has also fueled corruption within government ranks, evidenced by recent official arrests

In December 2022, Aref Akbari, the Public and Revolutionary Prosecutor of Hormozgan Province, announced the arrest of six rural mayors, three employees of the Ministry of Industry, and two members of the Engineering Organization on charges of collaborating with fuel smugglers.

The ongoing energy crisis, marked by power outages and disruptions to industrial and even government activity, has intensified calls for stricter oversight and technological solutions to curb fuel theft.

In a phone call with Armenian Prime Minister Nikol Pashinyan, Masoud Pezeshkian expressed his satisfaction with the peace deal, emphasizing Iran's long-standing support for "peace, convergence, and stability in the region, especially among neighbors, while preserving the territorial integrity of countries," according to a statement from the Iranian presidency.

Pashinyan briefed Pezeshkian on the negotiation process. He also acknowledged the development and dynamism in bilateral relations with Iran under Pezeshkian's leadership, according to Iran’s state media.

However, the positive developments were overshadowed by renewed tensions on the ground. On Sunday, Azerbaijan's defense ministry accused Armenian forces of firing on Azerbaijani positions from Armenia's southern Syunik province, a claim Yerevan denied.

The Nagorno-Karabakh conflict, a decades-long dispute between Armenia and Azerbaijan, intensified after the Soviet Union's collapse. Nagorno-Karabakh, known as Artsakh by Armenians, is a mountainous region within Azerbaijan, internationally recognized as such, but until 2023, was predominantly inhabited by ethnic Armenians.

Despite the tensions, both Azerbaijan and Armenia announced on Thursday that they had agreed on the text of a peace agreement, marking a potential breakthrough in the decades-long conflict between the two South Caucasus nations.

Tehran has consistently emphasized its interest in maintaining stability along its northern 44-kilometer border, given the potential for regional conflicts to intersect with ethnic and religious tensions.

Mehdi Babaei, head of the council’s safety committee, said the decision aligns with broader policies.

“Beyond banning advertisements, the sale of such goods in municipality chain stores and fruit and vegetable markets, as well as their procurement by the municipality, is now prohibited,” he said.

The measure explicitly targets brands identified as having Israeli ties, such as Coca-Cola and Nestlé, barring them from using the city’s advertising infrastructure, including billboards and urban media networks.

The council framed the move as a response to directives from Iran’s leadership, citing support for the Palestinian cause and efforts to restrict the economic influence of companies it considers linked to Israel.

The municipality is now tasked with implementing the policy across all advertising spaces under its control, ensuring that no municipality-affiliated stores or markets distribute the affected goods.

Officials say enforcement mechanisms will be detailed in the coming weeks, though past restrictions on Israeli-linked businesses in Iran have often relied on broader national trade policies rather than municipal oversight.

Last year, the Islamic Republic's Supreme Leader Ali Khamenei called on Muslim countries to isolate Israel.

He said Iran “has the definite expectation and suggestion” that Islamic countries sever political and economic ties with Israel, at least until Israel stops its war on Hamas, triggered by the Iran-backed group's assault on Israel on October 7, 2023.

Mohammad Reza Farzin, the governor of Iran’s Central Bank, unveiled the institution’s new report at a press conference on March 13, presenting various charts to journalists and describing the country’s economic situation as undergoing "acceptable progress."

He even displayed a chart comparing Iran’s economic growth with countries such as the United States, Saudi Arabia, and the Eurozone, based on estimates from the International Monetary Fund (IMF). He tried to persuade the public that Iran's economic growth surpasses these countries, and only India and China show higher growth rates than Iran.

In fact, prices for essential goods have increased by an average of 100% since Iran’s currency began a steep dive in September 2024, and a severe energy shortage shut down many industries.

The surprising issue is that IMF’s estimates about Iran’s economic growth is based on the statistics provided by Iran’s Central Bank to this international entity. Given the opaque and securitized nature of the Islamic Republic’s economy, no international institution has an independent estimate of Iran’s GDP growth.

The another issue is that different institutions of the Islamic Republic even provide contradictory estimates of economic growth, which also starkly contradict other economic indicators.

For example, while Iran’s Statistics Center has reported the country’s GDP growth in the first nine months of the current fiscal year (starting March 21, 2024) at 3.1%, the Central Bank has put this figure at 3.7%.

Contradictions with other indicators

The economic growth rates reported by Iran’s Central Bank and Statistics Center are based on constant 2021 prices. However, their figures conflict with other key economic indicators.

For instance, the Statistics Center claims that the agricultural sector grew by 3.3% from March to December 2024. Yet, its own labor market data shows a steady decline in agricultural employment since 2021, with the sector's share of national employment dropping from 15.4% to 13.7%.

Customs data further challenges these growth claims, showing that Iran’s agricultural imports surged from $11.5 billion to nearly $18 billion over the same period. Meanwhile, agricultural exports, which account for only a third of that amount, have remained largely stagnant. Despite these indicators, the Central Bank reports an even higher agricultural growth rate of 3.7% for the first nine months of the fiscal year.

The natural gas sector presents another discrepancy. While official data from Iran’s Oil Ministry and the International Energy Agency (based on 2024 statistics) indicate that Iran’s gas production growth has remained below 2%, the Statistics Center reports a significantly higher 5.7% growth rate.

Similarly, the industrial sector data raises concerns. Industry insiders report that widespread electricity shortages in the summer and combined electricity and gas shortages in the autumn led to the shutdown of 30% to 40% of industrial capacity for months. Yet, the Central Bank claims that industrial output still managed to grow by 1% in the summer and 3.4% in the autumn.

Further complicating the picture, a previous Central Bank report submitted to the Iranian Parliament’s Research Center estimated industrial growth at 1.7% for the summer and 2.9% for the autumn—figures that contradict its latest claims.

Discrepancies in inflation data

These contradictions are not limited to economic growth estimates. Even inflation statistics from the Central Bank and the Statistics Center differ significantly. While the Central Bank has reported Iran’s 2024 inflation rate at 45%, the Statistics Center has placed this figure at 35%.

Even more surprisingly, the International Monetary Fund, relying on data from Iran’s Central Bank, has reported Iran's 2024 inflation rate below 30%.

The exact real inflation rate in the country remains unclear. However, recent domestic media reports, indicate a sharp doubling of prices for food items, medicines, and other essentials. Meanwhile, official entities estimate much lower figures for these items.