Iran’s economy is in turmoil as the prospect of hyperinflation weighs heavy in 2024.
Estimates from the Central Bank of Iran (CBI) place inflation rates at 52.3%. Iran’s rampant inflation is largely attributed to the CBI’s practice of printing vast quantities of unbacked banknotes to cover the government’s escalating debts.
As per Tasnim News, Iran has printed 6 quadrillion rials ($9.8 billion USD) over the past 2.5 years, resulting in a staggering 115% increase in its monetary base within a 30-month period. The government’s heavy reliance on borrowing from the banking system to offset annual budget deficits has further exasperated Iran’s economy. Ever since 2018, following the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and global sanctions on the regime’s oil exports, Iran’s annual deficit has consistently surpassed 30%
In a desperate attempt to finance current expenses and bridge the budget gap, the Islamic Republic has also depleted two-thirds of the National Development Fund (NDF) reserves, initially established to safeguard oil revenues and support the private sector. As a result, the government’s debt to the NDF has swelled to over $100 billion USD, according to the report.
