How did economic inflation and stagnant buying power increase unrest in Iran during the 1970s?

During the 1970s, Iran experienced a period of extraordinary economic growth fueled by a boom in oil prices and heavy government spending on high-cost projects and military expenditures. However, this rapid expansion was not sustainable, as supply failed to keep pace with demand, leading to skyrocketing prices and high rates of inflation.12

While employment levels remained high due to government loans and credits, the buying power of Iranians and their overall standard of living stagnated. The government’s attempt to address these issues through a 1975 campaign against high prices—which involved arresting and fining traders and manufacturers—further damaged market confidence.2

These economic difficulties, compounded by the regime's failure to deliver on its promises and a sense of mismanagement, fueled widespread public dissatisfaction. This frustration was particularly acute among the working poor and new migrants from the countryside, who felt disenchanted by the cultural and economic realities of modern urban Iran, ultimately driving them toward the opposition led by the ulama.12