Iran’s President Masoud Pezeshkian told parliament the government could not afford to raise wages in line with inflation as lawmakers opened debate on the budget for the Iranian year starting in March, with a sliding currency and rising living costs adding pressure to the plan.
“When people are struggling with livelihoods, you cannot govern,” Pezeshkian told the open session. “They say increase wages; someone tell me where I should bring the money from?”
The draft budget submitted to parliament proposes a 20% rise in public-sector wages, while expanding income-tax exemptions to soften the hit from inflation, which has remained among the highest in the world.
Pezeshkian acknowledged the increase “is not proportionate to inflation,” but said the government had tried to compensate by raising tax-free thresholds.
Under the proposal, salaried workers earning up to 400 million rials a month (about $282) would be exempt from income tax, while those earning between 400 million and 930 million rials ($282–$655) would pay a 10% rate, according to figures cited by Iranian media.
Pezeshkian said the budget’s main aim was to reduce what he called “the fire of inflation” and avoid a deficit that fuels money creation. He said the government had raised its own current spending by only 2%, cutting what he described as nonessential lines and moving toward “performance-based budgeting,” under which ministries would have to specify services to receive funds.
Parliament Speaker Mohammad Bagher Ghalibaf said the budget’s wage assumptions needed further work, warning that household livelihoods were at stake.
“The importance of the budget is clear for all of us … the budget is people’s lives,” Ghalibaf told lawmakers, adding that the 20% wage increase “has its problems and needs to be corrected.”
Lawmakers warn currency slide and subsidy policy risk stoking prices
Several lawmakers used the debate to attack what they described as a lack of credible plans to stabilize the currency and contain inflation.
MP Mohsen Zanganeh said advisers to Pezeshkian believed the exchange rate would rise in line with inflation, which he said implied a roughly 40% increase by the end of the next year.
“Mr. Pezeshkian, your economic team has accepted that it does not have the ability to reduce inflation and control the currency rate, and therefore it is only seeking to give vouchers,” Zanganeh said.
Jabbar Kouchakinejad, a deputy head of parliament’s budget committee, said officials appeared unwilling to curb the exchange rate’s rise and suggested the government might be using hard-currency sales to plug fiscal gaps.
“It seems there is no will in the government to control the exchange rate and balance it,” Kouchakinejad told ILNA, adding: “This trend is continuing quickly and prices are rising rapidly.”
Pezeshkian said the government planned to expand targeted support, including a consumer voucher program, arguing that price swings in the currency market feed directly into household costs.
The government spent about $6 billion importing gasoline this year and had budgeted around $8 billion for subsidized foreign exchange for essential imports next year, while many goods were effectively priced at the market rate, according to the president.
He also pointed to energy subsidies as a core distortion, arguing that higher consumption channels more state support to wealthier households. He described the system as inequitable.
Iran has recently introduced a three-tier gasoline pricing system, keeping subsidized rates while adding a higher tier aimed at limiting subsidy costs and discouraging non-card refueling and quota overuse, a move officials have presented as gradual reform after past price hikes triggered unrest.
The budget deliberations come as Iran’s economy faces chronic inflation, sanctions pressure, and financial constraints that officials say limit room for maneuver, even as the government argues it is trying to protect lower-income households through tax exemptions and targeted aid.
The rial slid on Sunday to a new record low of 1,420,000 per dollar, as point-to-point inflation ran at over 50% and the central bank reported the economy had contracted despite a modest rise in oil output and sales.
Tehran’s unveiling of a towering statue depicting the Roman Emperor Valerian kneeling before pre-Islamic Persian King Shapur I has renewed criticism of the Islamic Republic’s appeal to nationalist sentiment following the June war with Israel.
For over forty years, the theocracy purged ancient Persian history from schoolbooks, replacing it with post-Islamic narratives. But after the 12-day conflict with Israel, officials have turned to the distant pre-Islamic past to rally a divided society.
From murals of ancient kings and soldiers to patriotic songs added to Shi’ite mourning ceremonies performed before Supreme Leader Ali Khamenei, Tehran now embraces imagery once deemed heretical by its own revolutionary ethos.
'Kneel before Iran' campaign
Tehran’s Revolution (Enghelab) Square was the scene of an unusual spectacle on Friday as officials unveiled a massive bronze statue depicting Roman Emperor Valerian kneeling in submission before Sassanid King Shapur I, commemorating Iran’s victory at the Battle of Edessa (260 AD).
The event was held under the slogan “Kneel before Iran,” part of what authorities describe as a campaign to project “national unity and historical pride” following the June war with Israel.
Tehran Mayor Alireza Zakani, a staunch ultraconservative, said on X: “Enmity with Great Iran can only end in kneeling before this historic nation.”
Municipal official Davood Goodarzi said the installation would be accompanied by visual displays depicting “other victories of Iranians over foreign aggressors,” including the defeat of British forces by local commander Rais-Ali Delvari, Mirza Kuchak Khan’s resistance against Russian troops, and Surena’s triumph over Rome at the Battle of Carrhae in 53 BCE.
The goal, Goodarzi said, is “strengthening concepts such as national dignity, social unity, and Iranian identity.”
The statue, he said, would remain temporarily at Revolution Square before being moved to a city gateway “where it will stand as the first emblem of Iran before diplomats and foreign visitors.”
Unveiled women were allowed to attend the unveiling ceremony—an uncommon scene at events organized by Tehran’s ultra-hardline municipality.
The turn to the pre-Islamic past
The sharp reversal also recalls remarks once made by Khamenei. In a 2011 speech, he asserted that “all the great military victories of this nation came after Islam,” dismissing pre-Islamic accounts as “things that are not documented.”
In 1987, he had said that prophets triumphed over kings such as Cyrus and that “nothing remains of these monarchs in history but names remembered with derision.”
Nevertheless, pro-government social media accounts have now gone so far as to circulate posters equating Khamenei himself with Shapur, showing him standing with a staff as Benjamin Netanyahu and Donald Trump kneel before him. The caption reads: “You will kneel before Iran.”
'Hypocrisy'
Pro-government figures have hailed the move as a patriotic success. Conservative political reporter Hossein Saremi posted: “Today’s grand Iranian gathering showed that people and the state share one essence: Iran itself. Nothing can take our homeland away.”
Others, however, called the spectacle “hypocrisy.” Journalist Gholamhossein Pashaei wrote on X: “Every year you close Pasargadae to stop people from celebrating Cyrus Day, yet you unveil Shapur’s statue in Enghelab Square with drums and fireworks during Fatimiyya (mourning period)!”
Dissident commentator Hamid Asafi called the ceremony “a perfect snapshot of the Islamic Republic’s contradictions.”
On Telegram he wrote: “A week ago they closed Cyrus’s tomb out of fear of the crowds, and now they glorify Shapur in the same breath. The Islamic Republic fears living history but poses for selfies with its corpse.”
He added: “They know people no longer respond to rosaries and sermons. That’s why they’ve brought history back to the stage—in a controlled costume. If they can’t erase the past, they’ll try to own it.”
The irony deepened as UNESCO formally recognized Cyrus’s Charter as one of the earliest human-rights documents.
President Masoud Pezeshkian wrote on X: “Iran, the cradle of dialogue, justice, and coexistence, can still inspire peace today.”
Users swiftly replied, questioning how such pride could coexist with a government that blocks access to Cyrus’s tomb each year to those wishing to visit it on his birthday.
