What have sanctions done to people’s livelihoods
Comparing banking transaction statistics and exchanged checks before the U.S. exited the JCPOA and in the early months of this year clearly shows the impact of the return of sanctions on the livelihoods of Iranian households.
According to Irangate, the rampant inflation in Iran’s economy has turned meeting basic living needs into a major challenge for many people. One of the main causes of this inflation is the global sanctions against the Islamic Republic. Examining the daily expenses of people before and after the sanctions clearly shows the impact of this issue on household livelihoods.
Sanctions and their effect on people’s tables
In recent years, the impact of sanctions on Iranian households’ tables has been quite noticeable. After Iran’s nuclear agreement with the P5+1 countries, known as the JCPOA, the living conditions in the country significantly improved. During this period, people could breathe a sigh of relief with the lifting of sanctions, but this opportunity did not last long due to the United States’ withdrawal from the JCPOA.
In May 2018, Donald Trump, the then-President of the United States, officially withdrew from the JCPOA, and the Islamic Republic faced increased sanctions pressure again. The impact of this event quickly became evident in people’s daily lives, making it more difficult for many Iranians to meet their basic needs, a situation that continues to this day and has even worsened.
Although in the past year, the government of Ebrahim Raisi has repeatedly emphasized the failure of sanctions due to the neutralizing actions of this government, the evidence does not support this claim. Examining official statistics not only does not show the neutralization of sanctions but also indicates a worsening of living conditions for various segments of society.
What do banking transaction statistics say
Official statistics released by the Central Bank indicate the direct and significant impact of the return of sanctions in 2018 on people’s everyday expenses and, consequently, the shrinking of Iranian citizens’ tables. This issue has been examined by comparing people’s banking transactions in two time periods: the first period is April 2018, before the United States exited the JCPOA, and the second period is April 2022.
According to these statistics, the total number of bank card transactions on the Shaparak network in April 2018 was about 1.45 billion transactions. This figure, with a 121% increase over four years, has reached about 3.2 billion transactions. The increase in the number of transactions due to population growth and the penetration of electronic payments among people is natural, but the noteworthy point in this comparison is the sharp growth in the transaction amounts.
Based on Central Bank statistics, in April 2018, the total transactions of bank cards amounted to over 117 trillion tomans, but in April 2022, this figure exceeded 543 trillion tomans, meaning a 362% increase in transaction amounts occurred in just four years.
Meanwhile, according to Central Bank statistics, the inflation rate over these four years was 268%. On the other hand, calculations in the table below show that the average amount of each banking transaction in April 2018 was 81,000 tomans, which has more than doubled this April, reaching 170,000 tomans.
Spending more, buying less
To better understand these numbers, imagine an individual going to a store for everyday shopping. This person used to make purchases in April 2018 with 81,000 tomans, but now they have to pay 170,000 tomans. The 268% inflation during this period indicates that this increase in payment is not due to an increase in the volume of purchases, but rather due to the runaway rise in prices.
In other words, it can be said that comparing the increase in the average transaction amounts in recent years with the living conditions indicates that the purchasing power of people has noticeably lagged behind the inflationary surges caused by the U.S. exit from the JCPOA.
In fact, not only can an individual not make the same purchases in 2022 with more than twice their money from 2018, but the volume of their shopping basket has also significantly decreased. It should be noted that this analysis does not account for the recent sharp increase in essential goods prices, and the current situation is much worse.
JCPOA, a glimmer of hope for low-income groups
As mentioned in this report, the volume and number of banking transactions in the two referenced periods clearly illustrate the worsening situation at people’s tables. A situation that in the past year, due to the sharp inflation spike and record-breaking point inflation in the thirteenth government, has made things more difficult for the low-income and middle class in Iran.
Of course, these statistics and figures are not the only evidence showing a meaningful connection between people’s quality of life and the direction of the Islamic Republic’s foreign policies, but reflecting on such reports can more than ever prove the existence of a direct relationship between the quality of life of Iranian citizens and the government’s approach to the Islamic Republic of Iran’s nuclear dossier.
The latest news and reports related to the JCPOA can be found on the dedicated Iran Gate JCPOA negotiations page.