For Iranians, the election is about the economy first, foreign policy second. The economic challenges include inflation, unemployment and devaluation of the national currency.

Inflation is disproportionately hurting the lower and middle classes. While Iran’s Central Bank reports that the inflation rate for 2012 has been 27.4%, Steve Hanke, professor of Applied Economics at The Johns Hopkins University and a senior fellow at the Cato Institute in Washington estimates that Iran experienced an inflation rate of 110% for the same period. This is quadruple the rate reported by the Central Bank.

This situation has taken place despite that during Mahmoud Ahmadinejad’s presidency, Iran’s oil revenue has amounted to over half the total revenue of the last 104 years, i.e., since the beginning of the production of oil in Iran. Notwithstanding this unprecedented revenue, the national currency has plummeted to one-third its worth a year and half ago. Financial sanctions meanwhile have restricted access to more than $60 billion of oil sale revenues deposited in Chinese and Indian banks.

Iranian economists have identified various root causes for the current economic turmoil. From a macro perspective, some blame the Ahmadinejad government’s poor domestic economic management while others consider the international sanctions as the main factor behind the dismal economical state. The fact is that economic mismanagement and sanctions have both contributed to the current situation.