Facing 40% Inflation, Iranians Wonder If And When Their Economy Will Rebound
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As negotiations continue to lift U.S. sanctions on Iran and revive the 2015 nuclear deal, Iranians wonder if and when the long-promised economic rebound might ease their hard times. On a visit to Iran, NPR's Peter Kenyon found people struggling with rampant inflation.
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PETER KENYON, BYLINE: In one of Tehran's covered markets, shoppers wander among stands selling everything from food to textiles to electronic goods. A cobbled street runs through it, and people stick to the sides as cars and motorcycles come barreling through. Like many Iranians, Maryam doesn't want her family name used for fear of retribution for speaking to an American reporter. She says she's been unemployed and looking for work for the past two years. Meanwhile, consumer prices are rising steeply, with the inflation rate since October staying above 40%.
MARYAM: (Through interpreter) This price hike is something that we have witnessed in the past couple years, and it is getting worse and worse. And it has become a daily and routine thing to expect tomorrow there will be higher prices than there were today.
KENYON: Maryam says she doesn't have much confidence that the new government, headed by hard-line cleric Ebrahim Raisi, will turn things around quickly when it assumes power in August.
MARYAM: (Through interpreter) Definitely he's not going to do anything because in Iran, president is a formality. And he is not the person who's got the upper hand to make any changes.
KENYON: That, she says, would be the supreme leader, Ayatollah Ali Khamenei. Nearby, a middle-aged man named Hodatat Ghorbani says he's willing to endure the hardships, quote, "to support and defend the revolution." He knows there's corruption, but he thinks most of the problems are due to American and European efforts to isolate Iran from the rest of the world.
HODATAT GHORBANI: (Through interpreter) And we are willing to have a friendly and amicable relationship with other countries, but there are some mischievous actions by certain countries in order not to allow this kind of good relationship of Iran with other countries to happen.
KENYON: Washington says the sanctions are over issues like human rights, Iran's support for militants and its nuclear program. There are some indications that the worst may be over. Djavad Salehi-Isfahani, professor of economics at Virginia Tech, says the Iranian economy appears to have bottomed out last year and is beginning to show signs of recovery. Foreign investment, in decline for several years, is up for the first time in a while. But he says incoming President Raisi faces a tricky path to a more robust economy, and some of his election promises seem optimistic at best.
DJAVAD SALEHI-ISFAHANI: At the same time, he has promised to create a million new jobs, which is very unrealistic because the current rate of job creation is half of that. And in the best of times, Iran has created about 700,000 new jobs every year.
KENYON: Salehi-Isfahani says Raisi's choice for finance minister may be one sign of how serious he is about the economy. Another will be his willingness to stick to the 2015 nuclear agreement, which is deeply unpopular with his hard-line supporters. He says Raisi needs to avoid getting caught up in pursuing hard-line social concerns, such as stricter enforcement of the Islamic dress code for women, which eased somewhat under Rouhani. Watching this year's electoral debates, Salehi-Isfahani says he got the impression that the candidates, including Raisi, grasped that idea.
SALEHI-ISFAHANI: They all know that these issues do not attract votes in Iran. They now have to realize that they don't attract investment and the energy of the productive sectors either.
KENYON: In Tehran, talk of the economy turning around has people wondering when they might see evidence of that in the marketplace.
Peter Kenyon, NPR News, Tehran.
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