Iran’s Winter Stress Test: Floods, Inflation, Corruption and More Elite Infighting

Staff WriterDecember 22, 2025
Iran’s Winter Stress Test: Floods, Inflation, Corruption and More Elite Infighting
Several students were injured after a school-service minibus veered off the road near Eyvanaki in Garmsar county, Semnan province, on Dec. 21, 2025

Several students were injured after a school-service minibus veered off the road near Eyvanaki in Garmsar county, Semnan province, on Dec. 21, 2025
Written by
Mahmoud Hakamian

Iran is closing out December under the weight of overlapping emergencies that are no longer unfolding in sequence, but at the same time. Flash floods in the south have killed civilians and disrupted basic services. Economic officials are conceding large-scale diversion of export currency through shadow licensing schemes. Health authorities are warning that food inflation is pushing protein and dairy out of household diets. And lawmakers—while publicly trading blame—are describing a market where prices can change multiple times in a single day.

The result is a country in which a natural disaster quickly becomes an infrastructure crisis, an infrastructure crisis turns into an economic shock, and economic shocks spill into public health—while the political system’s response is increasingly dominated by internal disputes rather than operational solutions.

Floods: deaths, isolation, and service failures
Heavy rains triggered flooding across southern provinces, killing at least seven people, according to Iran’s official news agency. IRNA reported fatalities in provinces including Fars, Khuzestan, and Hormozgan, and noted that a Red Crescent rescuer died during a rescue operation in Jahrom—an indication of how hazardous conditions have become not only for residents, but also for emergency personnel.

In Hormozgan’s Bashagard, reports described communications and power failures alongside road closures. Mehr News Agency reported that phone and internet services were cut, electricity was disrupted in dozens of villages, and the Bashagard route toward Minab and Jask was closed.

These details matter because they capture a recurring vulnerability: in peripheral areas, the immediate threat is not only flooding itself, but the loss of transport, electricity, and communications that delays rescue, interrupts medical access, and leaves families without reliable information or support.

Systemic corruption
Against the backdrop of disaster response, Iran’s central bank has publicly acknowledged a mechanism for large-scale currency diversion. A senior foreign-exchange official said roughly 900 “leased” commercial cards (trade licenses used in others’ names) were identified over the past two years, associated with more than $15 billion in unfulfilled currency-return obligations; he added that just 15 individuals account for about $6 billion of that total.

This is not merely an accounting story. Iran’s export rules require foreign currency earnings to be returned through official channels; when commercial cards are rented and registered to nominal holders, identity and accountability can be obscured. In practice, this drains foreign exchange from the formal cycle, tightens currency availability, and amplifies inflationary pressures that show up most sharply in essential goods.

The disclosure also raises a governance question that officials rarely address directly: how such a system can operate at scale without either sustained regulatory incapacity or selective enforcement.

Food inflation becomes a public health warning
In a significant shift, senior health officials are now framing food inflation as a public health emergency. In an interview carried by ISNA, the head of the Health Ministry office responsible for community nutrition warned that rising prices—especially for dairy and protein—are threatening nutritional health and increasing the risk of micronutrient deficiencies.

When authorities acknowledge that basic nutrition is being cut back broadly, the longer-term implications are clear: higher chronic disease rates, increased healthcare costs, and weakened productivity. This is how an economic shock becomes an intergenerational one—particularly for children and households already squeezed by rent and transport costs.

Medicines: reported price jumps and a tightening supply chain
The squeeze is also visible in medicine access. Fars News Agency reported that price lists circulated in recent days showed large increases—including claims of 100 percent rises for a set of commonly used medications—adding that the issue is not limited to a single company or a small number of products.

Beyond list prices, the distribution chain is showing strain. Mehr News Agency reported that the board of the regime’s pharmacists association warned in a letter to the health minister that pharmacies would stop issuing checks to distributors from early January 2026 unless insurance contracts and payment mechanisms are corrected. If pharmacies cannot reliably finance replacement inventory, the risk shifts from “higher prices” to “unreliable availability,” forcing substitutions or treatment interruptions for patients who cannot delay care.

Parliament’s blame game
As households absorb these shocks, lawmakers are turning the cost-of-living crisis into an open confrontation with the government. Khabar Online reported that MP Mohammad-Taqi Naqdali told parliament that rice had risen by 50,000 tomans per kilogram within a week and argued that repeated warnings to the government were no longer sufficient—calling for action rather than continued ultimatums.

Meanwhile, Tabnak reported comments by MP Manouchehr Mottaki describing inflation as no longer gradual but “projectile,” adding that prices can change morning, noon, and night and alleging that a large share of imported rice was hoarded rather than distributed.

Whatever the political intent behind these statements, they read less like concern for households than a display of outrage calibrated for public consumption. The underlying reality remains: when repricing becomes constant, families cannot plan, savings lose meaning, and the line between formal markets and opportunistic profiteering increasingly blurs.

Internal infighting displaces accountability
As pressures mount, parliament’s response is increasingly about positioning rather than relief. Speaker Mohammad Bagher Ghalibaf has been pushed to threaten impeachment of Pezeshkian-era ministers over the latest price spikes, turning the cost-of-living crisis into a blame game.

Across pro-regime media, the same pattern is visible: rival factions accuse each other of interference, weak management, and empty “unity” slogans, while key policy debates—subsidies, fuel rules, and market oversight—get reduced to blame-shifting. The public anger is real; what dominates in Tehran is the struggle to redirect it.

Iran’s crises are often treated separately—floods, inflation, corruption, food, medicine. In reality, they compound: disasters expose weak infrastructure, infrastructure failures deepen economic vulnerability, and economic vulnerability erodes nutrition and access to treatment. At the same time, senior officials acknowledge major leakages even as factions fight over responsibility. The outcome is a state absorbed in blame management while households carry the cost of both the shocks and the paralysis.

Staff WriterDecember 22, 2025
Arab-Islamic Committee in Defence of Ashraf
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