Budget Chief Dashes Hopes For Salary Rise Amid Inflation Crisis

Iran canot afford to give employees sizable pay hikes despite runaway inflation, the official in charge of economic planning has warned.

The head of the Organization for Planning and Budget, Davoud Manzour, was speaking as a deepening cost-of-living crisis had left workers hoping for a pay rise of at least 30%.

But Manzour said: “Despite the anticipated rise in salary expenses, actual income fails to materialize, leading to a deepening imbalance in the government's budget.”

Dashing hopes for a giveaway, he warned that dependence on the Central Bank and banks “triggers excessive withdrawals, an expansion of the monetary base, and an exacerbation of inflation”.

In the wake of the economic concerns, with inflation above 46%, Iran's government has put forth a proposal for a pay rise of just 20% for civil servants in the upcoming calendar year.

Iran has been rocked by waves of anti-regime protests and workers' strikes since 2017, fueled by discontent among young people, primarily attributed to the ongoing economic crisis.

Local media reports underscore the severity of the situation, noting that prices for some food items have doubled in 2023 compared to the previous year. Statistical data from the Statistical Center of Iran (SCI) reveals alarming increases, with the prices of mutton and beef soaring by 151% and 132%, respectively, in the current year.

The persistently high inflation has taken a severe toll on the poor and the middle class. Their struggle to afford basic necessities, particularly in terms of food and housing, has intensified as salary and wage increases have failed to keep pace with inflation.