Iran Faces Interconnected Crises of Soaring Depression, Demographic Collapse as President Admits Economic Failures

ERBIL (Kurdistan24) – Iran is currently grappling with a convergence of severe social and economic crises, as official data released on Sunday revealed a sharp spike in depression rates and government ministers warned of a catastrophic population decline, all against the backdrop of an austere new budget proposal.

On Sunday, December 28, 2025, while the National Research Center of Tehran University of Medical Sciences reported that depression rates have reached double the global average, Interior Minister Eskandar Momeni issued a stark warning that the nation’s population could halve by the end of the century.

These disclosures coincided with President Masoud Pezeshkian’s address to Parliament, where he characterized the prevalence of hunger in the oil-rich nation as "unacceptable."

The intersecting reports paint a picture of a society under immense strain, where economic stagnation has begun to erode both the mental health of the current citizenry and the demographic viability of future generations.

According to the National Research Center of Tehran University of Medical Sciences, approximately 12 million people, representing 13 percent of Iran's total population, are currently suffering from depression. This figure, which researchers noted is twice the global average rate for the disorder, highlights the severe psychological toll of the country's protracted economic isolation and internal mismanagement.

Kimia Saidi, a psychologist from Eastern Kurdistan, provided context to these figures in a statement to Kurdistan24. She identified the collapse of purchasing power as the primary driver of the mental health crisis. "The main reason for depression is that people cannot meet their living needs due to the poor economic situation, and thus they become depressed," Saidi said.

She further suggested that the official data likely underrepresents the true scale of the problem. "Although this is an official statistic, the number of people who have become depressed is much higher; now, 5.2 million more people have been added to the previous depression statistics," Saidi noted, adding that a significant portion of the population does not seek psychological counseling, leaving their struggles unrecorded in state databases.

The psychological impact of the crisis appears to be unevenly distributed, weighing most heavily on the Kurdish regions of the country.

According to official statistics cited in the report, the governorates of Kermanshah and Sina (also known as Sanandaj) in Eastern Kurdistan rank first and second in Iran for the number of depression sufferers. 

These areas also suffer from the fewest job opportunities and the highest unemployment rates in the nation, reinforcing the direct correlation between economic disenfranchisement and psychological distress.

Daniel Awasti, a citizen interviewed regarding the report, summarized the public sentiment: "The political and economic situation of the country, the neglect of human sciences such as psychology and sociology, leads to an increase in depression and the psychological collapse of society."

Demographic Alarm Bells

Parallel to the mental health crisis, Iranian officials are raising alarms about the country's long-term survival. On the same day the mental health statistics were released, the 'ILNA' news agency reported comments from Interior Minister Eskandar Momeni regarding a looming demographic precipice.

Momeni warned that if current trends persist, Iran's population, which currently stands at 92 million, could plummet to less than 40 million by the year 2100.

"The decline in the country's population growth at this current level will cause the population of our country to be less than 40 million people before the end of this century," Momeni stated. He described the situation as a "serious crisis" and urged the government to take immediate remedial steps.

The Minister highlighted that the continued decline in the fertility rate, coupled with a rising aging rate, constitutes a "real alarm bell for the future of the country."

The implications of this shift extend beyond social dynamics to the core of national security and economic stability. Momeni cautioned that the demographic contraction would have "extensive economic, social, and security repercussions," threatening the labor market and the solvency of pension systems.

While Iranian governments in recent years have attempted to reverse older "birth control" policies by offering financial incentives to encourage marriage and childbearing, officials acknowledge that these efforts have largely failed. The "poor economic situation and the rising cost of living" have rendered financial incentives ineffective, as young couples struggle to afford basic necessities, let alone the costs of raising a family.

A Deficit-Free Budget Amid "Economic War"

The root cause linking the psychological and demographic crises—the economy—was the central focus of President Masoud Pezeshkian’s appearance in Parliament on Sunday. Defending the budget bill for the Iranian calendar year 1405 (2026), Pezeshkian offered a candid admission of the government's failure to provide for its citizens despite the country's vast natural wealth.

"It is unacceptable to live in a country that is endowed with the blessing of oil and gas and produces nearly eight million barrels of oil and petroleum products daily, yet in that same country some are hungry, and at the same time we claim management," Pezeshkian told the open session of Parliament.

The President described the current fiscal year as one marked by "serious differences" from previous eras, citing the "greatest drought of the last half-century," plummeting global oil prices, and an "economic war" waged by foreign adversaries through sanctions.

To combat the soaring inflation that has devastated household purchasing power, Pezeshkian presented a strategy focused on strict fiscal discipline. "Inflation in the country is caused by the government budget deficit and the irregularity of banks," he explained, announcing that the government would strive for a "deficit-free budget" for the coming year.

This austerity approach involves capping the total budget increase at only two percent, significantly below the prevailing inflation rate. To achieve this, the administration plans to slash unnecessary credit lines and enforce operational budgeting for state agencies.

"From now on, the budget will be allocated to them only based on operational budgeting. Agencies must say what service they provide to the government in order to receive a budget," the President stated.

Restructuring Subsidies and Taxes

Recognizing the crushing weight of the cost of living on the "deprived" classes—the very pressure driving the depression and low birth rates cited by other officials—Pezeshkian proposed a radical restructuring of the country's subsidy and tax systems.

The budget bill includes a twenty percent salary increase for public sector employees. While this hike trails inflation, the government intends to offset the difference through targeted tax exemptions. Earners making up to 40 million Tomans will be totally exempted from paying taxes, while those earning between 40 and 93 million Tomans will face a tax rate of only ten percent.

Furthermore, Pezeshkian advocated for dismantling the current system of indirect subsidies for bread and fuel, arguing that they are inefficient and disproportionately benefit the wealthy.

"Currently, we provide 290 trillion Tomans in bread subsidies, but reviews have shown that bread reaches the people at a high price; why not give this same amount to the people?" he asked lawmakers. Regarding fuel, he noted the disparity wherein car owners receive millions in monthly subsidies while the poor receive nothing.

The President’s proposal involves shifting these funds to direct cash transfers, potentially providing households with a monthly subsidy of "several million Tomans." This "electronic coupon plan" aims to insulate the most vulnerable from currency shocks and ensure that the "people's table does not shrink."

The President also emphasized that justice and equity are paramount to his administration's mandate. "We cannot speak of management in this country if we cannot manage these resources fairly," he asserted. Pezeshkian projected that the government would spend the equivalent of 170 trillion Tomans from value-added tax revenues specifically on livelihood support for the poor.

Despite the focus on austerity, the budget includes ambitious plans for infrastructure, with the construction budget set to grow by more than 80 percent.

This growth relies heavily on new initiatives allowing government agencies to barter surplus assets to complete unfinished projects. Pezeshkian also highlighted a special allocation of 2.1 billion dollars from oil exports to complete strategic rail and transit corridors, such as the Chabahar–Zahedan–Sarakhs route, aimed at boosting trade with neighboring countries.

A Question of Legitimacy

The convergence of these three narratives on a single day—rising depression, falling population, and economic restructuring—underscores the existential stakes for the Iranian leadership.

The demographic dialogue in Tehran now emphasizes that any strategy to increase the population must be linked to broader economic reforms, including improving job opportunities for youth and strengthening the position of women.

President Pezeshkian closed his address with a warning to the political establishment regarding their own legitimacy.

He bluntly stated that the government's right to rule is contingent upon its ability to solve the daily struggles of the population. "I have no motivation either to rule or to remain President. If we cannot solve the people's problem, especially the deprived, and while people are grappling with livelihood problems, it is not possible to rule," Pezeshkian said.

He urged the Parliament to avoid adding "illusory revenues and definite expenses" to the budget, a practice that has historically deepened the deficit and fueled the very inflation that psychologists say is driving the mental health crisis.

"If we do not want to solve this situation, we will have no answer to give before God," the President concluded, calling for unity to navigate the profound challenges facing the nation.