President Masoud Pezeshkian said on Thursday that excessive government spending and an overgrown bureaucracy are major drivers of the country’s persistent inflation, arguing that only by shrinking the state can Iran restore financial balance and ease pressure on households.
“The government, which has grown large and costly over the years, has placed much of the inflation burden on the people,” Pezeshkian said during a meeting with provincial officials in Kordestan province.
“While the state should serve producers, in many sectors we have reached a point where there are plenty of directors and managers but little productivity.”
He added that structural reform lies in downsizing the government, a process he described as difficult and time-consuming because “many have grown accustomed to rank and ceremony, and that mindset must change.”
Pezeshkian also warned that excessive state spending beyond national means “ultimately translates into inflation that weighs on people’s livelihoods.”
He said he had instructed provincial governors to reduce administrative expenses to free resources for supporting vulnerable groups.
The president acknowledged that international sanctions had intensified economic strains but said domestic inefficiencies, rather than foreign pressure alone, remained the root cause of inflation that official data places at about 40%.
