Inflation, the "hidden tax": the Iran Prosperity Project explains Prince Reza Pahlavi's message

In his recent message, Prince Reza Pahlavi described inflation as a "hidden tax": a tax the Islamic Republic takes from people's pockets, without passing any law for it, by eroding their purchasing power. On Monday, 12 October 2026, the Prince's media office published a video in which Borgan Nezami, an economist and one of the authors of the Iran Prosperity Project, explains to viewers how this tax works.

According to Borgan Nezami, inflation erodes the value of people's savings even when deposits earn bank interest, because when the inflation rate is higher than the interest rate, the depositor in effect gets poorer every year. The video is part of a Q&A between Shouka Bidarian, communications director of the Iran Prosperity Project, and the economist, which also covers the importance of moving away from the rial and ways of countering the fall in the value of money.

The hidden tax and people's tables

The Prince's message comes as Iran's economy is shrinking under the pressure of war, sanctions and the US naval blockade. In its latest report the International Monetary Fund forecast that Iran's economy would shrink by 7.6 per cent this year, and the Islamic Republic's crude oil exports fell to zero in October. This same week, the 500,000-toman increase in the food voucher did not even cover the price of a kilo of meat.

The Islamic Republic's budget deficit has for years been covered by printing money and borrowing from the central bank; the very mechanism economists call the "inflation tax", whose burden falls above all on salaried workers, pensioners and small savers.

The Iran Prosperity Project's plan

The Iran Prosperity Project, which with Prince Reza Pahlavi's support prepares expert plans for the transition period, regards the stability of the national currency and the curbing of inflation as among the main pillars of rebuilding Iran's economy after the Islamic Republic.

Prince Reza Pahlavi called inflation a "hidden tax", a tax paid out of people's pockets through the erosion of purchasing power.