The population is tightening their belts in the face of dramatic increases in prices

TEHRAN (AFP) – At his butcher’s shop in Tehran’s popular district of Molavi, Ali skillfully slaughtered a sheep in front of a dozen shoppers whose only topic of conversation was inflation.

Salt and pepper hair, when he talks about the dramatic increase in prices that are reducing his customers, makes him look gray.

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“What can I tell you? My sales have dropped by almost half. I’m a butcher and for a few weeks I don’t eat meat. Prices keep rising,” he told AFP.

On the sidewalk, Ali holds 63-year-old retired government employee Asghar, a bag of pieces of meat for him and his wife.

“We used to buy a lot more but that’s the end of it. Everyone is declining, we’re all under pressure,” he said.

According to media reports, the price of red meat has risen by 50%, the price of chicken and milk has doubled, and the price of cooking oil has quadrupled.

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Iranians, who appreciate a good meal of meat with rice, spices and other flavors, are now lagging behind on bread, chicken, although poultry and egg prices have doubled in mid-May since the subsidy ended.

Bread has become the most popular food to get rid of this inflation. Prices have remained stable after the government promised that the price hike would not affect fuel and medicines as well.

The demand for bread is increasing

At his traditional bakery in southern Tehran, Mojtaba, 29, said sales had risen since President Rice, who came to power in August, made the promise.

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“We’re cooking extra because people are taking refuge in bread, because they can’t buy rice, cooking oil, pasta. Some people now eat bread almost exclusively,” he explains. Dig in the ground and knead the flour for a new batch in his oven.

“The queue at the bakery has gotten longer,” said Shadi, a housewife who wears a black sheet.

Iran is facing a serious economic crisis in 2018 due to sanctions imposed by former US President Donald Trump for a unilateral withdrawal from the Iran nuclear deal.

According to experts, the crisis has led to a devaluation of the currency, with inflation exceeding 40% per year since 2018.

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After the IAEA passed a resolution against Iran this week, the prospect of a deal faded and the value of the riyal plummeted after sanctions were lifted. On Sunday, it took 337,000 riyals for one dollar, 25% more than at the end of March and ten times more than in 2017.

For economic analyst Saeed Lailaj, “the country has faced the worst inflation since World War II in the last four years.”

This was accelerated after President Ibrahim Raisi announced changes to the subsidy system in mid-May, pushing up prices of basic commodities such as flour, meat, eggs and cooking oil.

Hundreds of Iranians have protested in several cities in recent weeks. These protest movements have been linked to others that have been going on for months to raise the level of better wages and retirement pensions in various sectors.

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– Minister resigns –

According to government spokesman Ali Bahaduri-Jahromi, Labor Minister Hojatullah Abdolmaleki resigned on Tuesday, citing a desire to see “improvements in the services provided to the population”.

But for the reformist newspaper Ittemad, his resignation follows “critical criticism he received from pensioners.”

For Mr. Lailaz, he explains two reasons for the rise in prices: the “sharp rise in inflation in the world” with the conflict in Ukraine and the beginning of “massive economic reforms in Iran (…) which will inevitably lead to excess inflation.”

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For this expert, a number of former economic advisers to the Iranian president, many have been annoyed by the removal of subsidized exchange rates since 2018, which allowed the import of basic products such as wheat, cooking oil and medicine at optimal rates. Equipment

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But for Mr Lailaz, the exchange rate crackdown was inevitable, especially since talks with major powers on nuclear power have not yet resulted in an agreement to lift sanctions.

“If Iran wanted to keep the same priority rate as in previous years, we would need 22 22 billion this year,” he said.

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