Protests erupted across multiple cities in Iran beginning on , triggered by a collapsing currency and soaring living costs, according to recent analysis. The unrest underscores a deepening economic crisis within the country, exacerbated by both international sanctions and internal austerity measures implemented by the Islamic Republic.
The immediate catalyst for the demonstrations was the state’s decision to remove preferential foreign exchange rates for essential goods and key production inputs, a measure embedded within the fiscal-year budget. While officials framed the move as anti-corruption reform, promising compensation through cash transfers and targeted support, the practical effect was a rapid acceleration of inflation and a further erosion of purchasing power for Iranian households.
Official inflation in was reported at around 42 percent, but the cost of basic groceries rose at a significantly faster rate of 72 percent compared to the previous year. This surge in prices pushed staples like bread and dairy out of reach for large segments of the working class, intensifying the economic pressure and fueling public discontent. By early , the removal of preferential exchange rates had deepened the squeeze on everyday consumption, escalating protests into widespread demonstrations lasting for weeks.
This is not an isolated incident. Successive Iranian governments over the past decade have presented price liberalization and currency adjustments as necessary steps to stabilize markets and combat corruption. However, these policies have consistently functioned as austerity measures, shifting the burden of economic hardship onto the population. Service-based welfare programs have been replaced with cash-based handouts that quickly lose value due to chronic inflation.
The current crisis echoes previous instances of unrest triggered by similar economic policies. The and fuel price hikes are notable examples, both of which sparked mass protests that were ultimately suppressed with lethal force. The current wave of demonstrations appears to be following a similar trajectory, but with a heightened intensity.
The response from the Iranian government has been severe. By mid-, estimates suggested that thousands
had been killed, and the country was placed under an indefinite communication blackout – encompassing both internet and phone services – representing one of the deadliest episodes of repression in the Islamic Republic since the purges of political dissent in the .
The situation is further complicated by the interplay between external and internal forces. Any comprehensive understanding of Iran’s crisis, according to analysis, must confront both the external sanctions regime and the internal mechanisms that manage crisis through austerity and repression. The sanctions regime, while intended to exert pressure on the Iranian government, has been absorbed into the existing austerity policies, exacerbating the economic difficulties faced by ordinary Iranians and contributing to the conditions that fueled the protests.
The disruption to trade was also significant. As the exchange rate became increasingly volatile, sections of Tehran’s Grand Bazaar and commercial centers closed, as rapidly shifting prices made imports, pricing, and trade impossible. This economic paralysis further fueled public anger and contributed to the escalation of the protests.
The protests highlight a pattern of shock politics
, where the government introduces sudden, regressive measures in the name of reform, provoking unrest and then responding with repression. This cycle of austerity, protest, and repression underscores the deep-seated economic and political challenges facing Iran, and the growing frustration among its population.
