The Iranian rial's significant devaluation has surpassed 50% within a year, escalating inflation and the cost of living, particularly affecting lower and middle-income groups. Economic expert Mohammad Reza Farzanegan notes that this uncertainty is leading to decreased political engagement. A study he conducted reveals that sanctions imposed on Iran since 2012 have severely hindered middle-class growth, suggesting that the annual middle-class size could have been approximately 11% larger without these punitive measures. Meanwhile, state-affiliated companies, particularly those connected to the Revolutionary Guards, are thriving under the current sanctions, increasing their market dominance.
Economic uncertainty means that worries about the cost of living are coming to the fore and political engagement is declining, according to Mohammad Reza Farzanegan.
From an economic point of view, there is considerable doubt that weakening the middle class contributes to achieving the goals international political pressure would like.
State-affiliated companies, particularly those with ties to the Revolutionary Guards (IRGC), have been able to benefit from sanctions and strengthen their market position.
If sanctions had not been imposed, the annual middle-class size would have been approximately 11 percentage points larger on average.
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