Iran's parliament impeached Economy Minister Masoud Karbasian on Sunday in the latest blow to embattled President Hassan Rouhani as he struggles to face down a mounting economic crisis.

Karbasian is the second cabinet minister to be sacked this month, following the impeachment of Labour Minister Ali Rabiei on August 8.

He lost a vote of confidence, which was carried live on state radio, by 137 votes to 121, with two abstentions.

The outcome sees him stripped of his post with immediate effect, leaving Rouhani to pick a replacement.

Critics say the government squandered the opportunities presented by the 2015 nuclear deal and have failed to tackle high rates of inflation and joblessness.