TEHRAN BLOG: Persian New Year set to bring more gloom for Iranians

TEHRAN BLOG: Persian New Year set to bring more gloom for Iranians
Iranians fear the next Persian year on March 20 will bring more economic misery. / CC: bne Tehran bureau
By bne Tehran bureau March 18, 2024

Iranians will celebrate the start of the Persian New Year Nowruz on March 20, at the exact time of the spring equinox, ushering in the year 1403. Nowruz, meaning “New Day”, has been celebrated by Iranians and people across Asia as far north as Kazakhstan and Russia since 3,500 years ago. However, there isn't much cheer this year.

1403 is expected to be another year of economic struggle and political stagnation following this year’s parliamentary elections, which saw nearly 60% of the electorate disengage from voting entirely as the non-oil economy continues to sink.

Following the voter apathy shown in the elections, Iran’s President Ebrahim Raisi said: "The ill-wishers of our beloved Iran had mobilised all their efforts to make the elections on 11th Esfand lacklustre.” 

The past few weeks also saw the Iranian rial fall to its lowest-ever level against the US dollar, currently topping out above IRR600,000, according to local trading channels on Telegram.

Official inflation in the country currently stands above 44%, according to the Statistical Centre of Iran (SCI). However, many are dubious of state figures, suggesting the figure is far beyond that in categories including food and drinks.

Although the country's annual inflation rate has decreased, the general public has not yet felt its impact. Many people believe that the economic situation will deteriorate in the upcoming Iranian year due to various evident signs, including the rising prices of US dollars and commodities.

This Nowruz also happens to bump into the Islamic holy month of Ramadan, making it even more sombre as people are requested by the faith to opt out of drinking and eating in daylight hours. Still, many will probably ignore Ramadan entirely as secularism continues to grow in the Islamic Republic.

To understand the feeling on the ground, bne IntelliNews correspondents conducted a series of interviews across the Iranian capital in the runup to the festivities, which will cause state and businesses to shut down for a two-week period. Reporters asked Iranians their thoughts as the country begins another year under crushing American sanctions and local “incompetence”, as one respondent called the government's handling of the economic crisis.

People believe that Iran’s economic situation could become considerably worse than it already is. Many people predict the rial's rate to the US dollar price could even reach about IRR1mn. If this prediction turns out to be correct, the cost of Iranian goods tied to the US dollar will skyrocket, which would cause further economic strife.

Iranians are adept at dealing with hyperinflation and price all goods in the unofficial currency of the “Toman”, which is the rial but minus a zero. However, people are also losing track of the Toman’s increase each year as prices reach trillions, particularly property and large business transactions.

‘Just wait and see’

In what appears to be a fundamental change of tone, people in the Iranian capital have lost “all hope” and believe that the economic situation might deteriorate rapidly after the holidays. 

“It will surely get worse. Right now, the US dollar is about IRR600,000, and it will reach IRR1mn next Nowruz (2025). Just wait and see,” said 63-year-old Ali in Tehran’s wealthy northern district of Tajrish.

He added that there was a negative mood, and like many of the respondents to our interviews he felt the authorities were unable to change the fortunes of the country’s currency.  

“I think it will deteriorate,” said Masoud, who operates his corner grocery store in the Nirooye Have’e area of the city.

“You see, the price of each kilogramme of banana used to be equal to $1 in the market. However, it has increased to between IRR800,000 and over IRR1mn in different shops, which is higher than the USD price in the market—I think it will get worse,” he said.

Masoud’s feeling was echoed across the city in the Afsarieh area. “I think it will get worse. It's obvious,” said one woman who didn’t want to be named as she shuffled her toddler down the pavement.

‘The economy will get worse next year’

Downtown, in the archaic Grand Bazaar area, traders are less than impressed with how the government a mile down the road are handling the rial.

“The banks are now selling gold coins based on a USD price of IRR900,000; I think the economy will get worse next year,” said 39-year-old Saeed at Imam Khomeini Square, looking at the price charged by independent dealers for the PlayStation 5.

He added that he wanted to buy the game console for Nowruz, a traditional time when families give gifts to each other, but the past few years have made that impossible for all but the wealthiest Iranians.

In Tehran’s lower working-class area of Khazaneh, outside a flower shop, 25-year-old Zohreh said she was unable to cope with her minimum wage salary.

“They should reach an agreement [with the Western powers], but these [President Raisi and his cabinet] won’t back down… Until the international situation is like this, the situation will remain the same, and the economy will worsen,” she said.

In the Bani Hashem area in the east of Tehran, close to the well-known medical Royan Institute, Iranian medical researchers had little hope for  the upcoming year.

“God willing, hopefully, it will not get worse, but it won’t get better either,” said 43-year-old Saeedeh.  

Bne IntelliNews surveyed more than 180 people across Tehran in our inaugural “State of Iran” survey, which included more than 184 people. Out of that total, 124 people said the economy would get worse in the next year, 38 said it would remain stable, and 4 said the country would rebound. 18 people questioned were neutral.