This article analyzes the monetary and non-monetary factors affecting inflation in the Iranian economy. The findings show that the growth of liquidity resulting from the government budget deficit and borrowing from the central bank is the main monetary factor of structural inflation. On the other hand, currency shocks, sanctions, and disruptions in the supply chain as non-monetary factors, especially during crisis periods (such as 2018-2022), have had a dominant contribution to the intensification of inflation. A review of historical data (1959-2023) indicates a dynamic interaction between these factors: liquidity growth, with a share of about 32.58 percent, has the largest monetary impact, while the jump in the exchange rate (a 300 percent increase over the last four years) and import restrictions resulting from sanctions have pushed inflation to unprecedented levels. Institutionalized inflation expectations also intensify the inflationary cycle by increasing the speed of money circulation and speculation in asset markets. This study emphasizes that controlling sustainable inflation requires combining contractionary monetary policies (such as inflation targeting and central bank independence) with structural reforms in the tax system, reducing dependence on oil, and managing inflation expectations.

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