The American Heritage Fund's annual economic freedom index ranked Iran 170th out of 177 countries in terms of economic freedom and prosperity.
According to the study, Iran received a score of 42 out of 100, and was ranked lowest in the Middle East in economic openness.
The index examined criteria such as the rule of law in the country, the size of the government and its involvement in the economy and the effectiveness of regulation.
In the last five years, Iran has recorded a growth rate of 1.2 percent, a given figure in a significant reduction in the country's economic freedom and entry into a austerity regime in many areas, such as food production and fuel rationing.
"The Iranian economy has sunk in sharp decline in terms of economic health and freedom to do business. It has lost eight percent of the mark since 2017, and has since fallen into the definition of a depressed economy," the study said.
Ayatollah Khamenei, Photo: IPI
"Iran's economy has eroded under mismanagement, international sanctions and corruption under the repressive regime of the Islamic Republic," the report said.
The study's findings came to light last week when the Majlis (Iranian parliament) decided to cut food and drug subsidies worth $ 9 billion.
The move came about due to the deepening of the Conservative faction's control over parliament, which allowed President Raisi's government not to fear upsetting the weak urban population, which traditionally supports conservatives and the regime.
The subsidies were adopted by the previous government shortly after the return of sanctions by the previous president, Donald Trump.
But despite the political feasibility of the move, the abolition of aid in lowering food prices could be the difference between poverty and hunger for large sections of the population.
Iran's religious elite fear the loss of support from the lower classes, and some clerics have been quick to condemn the move.
Ayatollah Ahmad Janati, chairman of Iran's expert committee, one of the country's strongest religious bodies, has warned that in the current situation the government "will not be able to fill the belly of the citizens."
The 95-year-old cleric, an elder of the Islamic regime's tribe, said: "It would be a miracle if the government managed to feed all the citizens. The role of the state is to lift the people out of poverty, not to endanger them by starvation."
In Tehran, they are waiting to see if the Biden administration will extend the lifeline in the form of lifting sanctions, but in Iran, the ordinary citizen has meanwhile been forced to tighten his belt.
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