Economic situation in Iran

Targol and Massoud are both Project Managers in respectively telecommunication and IT security companies, are mid 30 and are married for 14 years without child. They have a good situation (upper middle class) they get before Ahmadinejad became president (2005). Everything got worse and more expensive under Ahmadinejad’s presidency:  ~30% inflation but with salaries growing only at about 10%. If they could buy their flat some years ago (for about $20 000), it would be more difficult today since the value of it is 4 times more within 6 years. Their flat is about 70 square meters, and very well equipped.

Siamak used to work for an Iranian construction company. At that time, he considered leaving Iran will be too difficult: you need to learn foreign languages and cultures and leave your friends, etc. However, in 2012, he considers that staying is too risky! Thus, he and some of his friends are now in a process to quit Iran and immigrate in Quebec, Canada, which seems to be a paradise for good educated workers!

In Iran, many parts of the economy used to be push with subsidies. However, in the last years, the government stopped most of them (on food, energy, etc), letting the prices increase. As a compensation, he still give now about 4 millions $ a month (~200€) per citizen.

For instance, one year ago, you could get one liter gasoline for only 1000 IRR, but after the government stopped the subsidies, it rose to 4000 IRR. Every registered car can get 60 liters per month at this price, and over the quota, you pay 7000 IRR. But starting in July 2012 with the European embargo on Iran, the price are raising to 7000 and 11000 IRR (½ €)

These European restrictions like every embargo affect much more the population that the government. Everything is getting more expensive, and the Rial is losing its value.

I am not sure it is directly related, but the exchange rates increased quite a lot these last days. For 2 weeks, you could get ~ 22500 IRR for 1€. On the 26 and 27th, you could get more than 24000 IRR. Same game applies for the $US, rising from 16000 to 19000.

More than the politic and foreign threat and their populist and stupid propaganda (“Iran will nuke Israel”, or “Israel will fight against Iran to prevent this nuke”), the economic situation becomes very difficult here!

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