The 'Kalabarg' program to combat rising cost of living in Iran

In Iran, due to the cost of living and high inflation, following the protests that began on December 28, 2025, sharp price increases occurred in basic consumer goods, particularly in food items such as oil, meat, and eggs. Aiming to reduce the impact of rising living costs on citizens, the government has implemented an elecfollowing the criticisms and protests variousnew economic measures were put into effect. In this context, theelectronic coupon system called "Kalabarg"allows households to accessmilk, cheese, oil,rice,meat, and eggs, among other basic foodaims to ensure easier access to food itemsandoperates. The Kalabarg system functions as a digital document or credit mechanism assigned to citizens by the state andforeign exchange subsidiesaims to reduce the rent-seeking resulting from them.

"A decline in the prices of some productshas begun"

Protests accelerating price increaseshad already caused widespread public outcry, and some productsfor ashortperiod had become unavailable on market shelves. Officials and sectorrepresentatives attributed this situation to speculative activities, diswhile noting that it is linked to disruptions in the distribution chain and economic pressures, in recentdays, chain marketsin particular at retailoutlets, essential products are being restockedand prices for some items have begun to fall. Thegovernment, with the stepsthe steps taken have provided partial relief in the markets and that the strengthening of pricestability isbeing targetedin the coming period, they emphasize.

"Until now, as a people, we havefaced manyproblems"

The Iranian public, however, remains cautious about the steps taken to combatthe rising cost of living following the intense protests.Zohre Nosrati, an Iranian citizen, stated, "Based onpastexperiences,there are price increases due to the extraordinaryconditions in the economy. The government'sefforts are...of the cost of living decisions taken to preventit. As a public, we have facedmany problems until now.I believe we will overcome thisaswell," he said.

Ali Reza Akbari, an Iranian citizen, said, "The government's electronic coupon support has been helpful, but it is not enough. Prices have increased compared to the past."asyou can see, the public continuesto shop," they stated.

The preferentialforeign exchange ratesystem

The Iraniangovernment alsoAdditionally, ithas made adjustmentsto the preferential foreign exchange rate systemin order to preventsudden fluctuationsin the exchange rateand to control price increases.It was. For many years, thesystem in effect, for somebasic products' importsto be used at a price below the free market exchange rate for foreign currencyfor importsproallocated to the intended. However, thefailure to use theforeign currencyprovided at a lowexchange rate for its intended purpose, and the fact that imported products were not offered to the market at the expected price levelsand due to gaps in oversight within the distribution chain, the implementation faced intense criticism. Economic circles argue that the preferential exchange rate has over time turned into a mechanism forrent-seekingandhasledtodistortions and price increasargued that it was insufficient in preventing the price hikes.