Families, retirees report security force action in several Iran cities

The euro was trading around 1.72 million rials and the pound at about 19.94 million rials, traders said.

The latest slide follows sharp swings since late December, when the currency’s plunge helped trigger protests in Tehran and other cities that have increasingly taken on a broader political edge.

The government has floated new relief measures after moving to curb access to subsidized foreign exchange used for importing basic goods, a system critics say has fueled distortions and rent-seeking while failing to contain inflation.

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  Iran says food prices to jump as currency subsidies end

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  Can Iran's plan for a $7 monthly cash handout calm the streets?

President Masoud Pezeshkian’s administration has signaled it will shift support toward households, including a proposed monthly electronic credit or coupon scheme aimed at cushioning low-income families from price rises as the subsidy regime is rolled back.

Iran’s economy has been hit by years of sanctions and chronic inflation, and many Iranians turn to hard currency and gold as stores of value during bouts of political and economic uncertainty.

Iran’s Interior Ministry described recent protests as “riots” in a report to parliament and said about 85% of calls to take part were made through foreign platforms, according to lawmakers briefed on the report.

Ebrahim Rezaei, spokesperson for parliament’s national security and foreign policy commission, said Security Deputy Interior Minister Ali Akbar Pourjamshidian told lawmakers that “rioters destroyed government buildings as well as private and public vehicles,” and said “most of those injured were police, security forces and Basij members,” adding that forces had acted with “restraint.”

Rezaei said the deputy minister also told the commission that “security is established” and that the trend in incidents was “declining,” while some lawmakers urged officials to “speak with the people” and address the roots of protests.

The fate of the Iranian economy is increasingly shaping debates about the country’s future, one that may prove decisive regardless of how its current political struggles unfold.

Public frustration over rising living costs has once again spilled into protests across the country, shining a harsh light on how state resources are allocated and managed.

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Public frustration over rising living costs has once again spilled into protests across the country, shining a harsh light on how state resources are allocated and managed.

As demonstrations continue, economic indicators are emerging as a central measure of both state capacity and public confidence.

That tension is visible in Iran’s draft budget for the next fiscal year, beginning on March 22. The document offers a snapshot of priorities at a moment marked by military confrontation, diplomatic strain and widening economic pressure.

A budget shaped by security concerns

According to the draft, the government has projected just 1,850 trillion rials in oil export revenues for itself—equivalent, at the official exchange rate, to roughly $2 billion.

By contrast, allocations tied to military and security institutions account for at least 16 percent of total budgetary resources, while the share of oil export revenues linked to the Islamic Revolutionary Guard Corps is estimated to be several times larger than that of the civilian government.

Funding for religious institutions is projected at close to half of the government’s oil income.

At the same time, projected tax revenues have risen by 63 percent, signaling a heavier burden on households and businesses amid high inflation and weak purchasing power.

Taken together, the figures raise questions about how effectively state revenues are being translated into economic stability or improved living standards. They also complicate expectations that external relief alone—such as sanctions easing—would be sufficient to reverse economic decline.

An economy with untapped potential

Official data underscore the scale of resources involved.

Even under extensive sanctions, Iran’s crude oil export revenues over the past five years have totaled approximately $193.5 billion.

Yet over roughly the same period, Iran’s gross domestic product has contracted sharply, falling from around $600 billion in 2010 to an estimated $356 billion in 2025. The divergence between export earnings and overall economic output has become a central puzzle for analysts.

According to Iran’s Central Bank (CBI), the country earned $65.8 billion from exports of oil, petroleum products and gas in the last fiscal year, while total general government revenues projected in the new budget amount to about $45 billion.

Growth, allocation and the missing link

In purely arithmetic terms, current energy exports alone exceed projected state revenues, even before accounting for taxation, domestic fuel sales or other income sources.

The structure of Iran’s economy further complicates comparisons with other sanction-hit or conflict-affected states. Services account for more than half of GDP, and non-oil exports remain substantial, according to the CBI—a markedly different profile from countries such as Iraq, where non-oil exports account for less than 10 percent.

These figures suggest that Iran’s economic capacity, diversification potential and revenue base remain significant, even under constraint.

The unresolved question is not one of resources alone, but of how those resources are absorbed, allocated and converted into sustainable growth.

As protests continue and political outcomes remain uncertain, the condition of the economy—more than any single diplomatic or security development—is likely to shape Iran’s trajectory in the years ahead.

Iran’s plan to issue monthly coupons worth about $7 to nearly the entire population has prompted warnings from local economists and media that it could stoke inflation and strain already weak state finances, even as authorities present it as a way to ease anger over soaring prices.

The daily Setareh Sobh called the move an “economic gamble,” recalling that the currency has lost around 20,000 percent of its value since 1979 and blaming decades of policies including hostage‑taking, hostility toward the West and Israel, and mismanagement, while economist Mahmoud Jamsaz argued the government “lacks the executive power” even to pay public employees’ salaries and officials themselves admit the scheme could drive prices of basic goods up by 20 to 30 percent.

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