{"id":111477,"date":"2026-05-13T08:59:15","date_gmt":"2026-05-13T08:59:15","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/111477\/"},"modified":"2026-05-13T08:59:15","modified_gmt":"2026-05-13T08:59:15","slug":"soaring-inflation-and-plummeting-economy-test-iran-in-wartime","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/111477\/","title":{"rendered":"Soaring inflation and plummeting economy test Iran in wartime"},"content":{"rendered":"

TEHRAN, Iran (AP) \u2014 Iran\u2019s grip on the Strait of Hormuz is throttling the world\u2019s energy supplies<\/a> and inflicting global economic pain<\/a>, but the struggles of the Islamic Republic\u2019s own economy are testing its ability to withstand the war<\/a> and defy Washington\u2019s demands<\/a>.<\/p>\n

Iranians have been hit by spiraling prices for food, medicine and other goods. At the same time, the country has seen mass job losses and business closures caused by strike damage to key industries<\/a> and the government\u2019s monthslong shutdown of the internet<\/a>.<\/p>\n

The economic cost of the war and the U.S. naval blockade<\/a> \u201chas been very substantial and unprecedented for Iran,\u201d said Hadi Kahalzadeh, an Iranian economist and research fellow at Brandeis University.<\/p>\n

But Iran has withstood decades of economic pressure<\/a> and sanctions and its capacity to adapt has not been dismantled, Kahalzadeh said.<\/p>\n

\u201cIran can probably avoid a complete economic collapse or total shortage of essential goods, but at a very high cost,\u201d he said. \u201cThe main cost will be passed to ordinary Iranians through higher inflation, more poverty, weaker services and a much harder daily life.\u201d<\/p>\n

The International Monetary Fund has predicted the Iranian economy will shrink by about 6 percentage points in the next year. Iran\u2019s official statistics center reported in mid-April that annual inflation was 53.7%, while inflation for food breached 115% compared with the same period last year.<\/p>\n

Meanwhile, Iran\u2019s rial currency<\/a> has lost over half its value in the past year, falling to a record low of 1.9 million to the dollar at the end of last month. The economic woes helped fuel massive protests that spread across the country in January.<\/p>\n

Steep prices on staples<\/p>\n

Parked beneath an overpass in central Tehran, 56-year-old Hossein Farmani was idling alongside other taxi drivers waiting for customers. He popped open the trunk of his car to take out a kettle before pouring himself a glass of tea. He reflected on the wild price increases in the past year. Alongside items such as milk, the price of tea has risen over 50% since the war began.<\/p>\n

\u201cIf things keep heading in this direction, we\u2019re going to suffer a lot more,\u201d Farmani said.<\/p>\n

Prices had already climbed steadily over the past two years, but an Associated Press tour of grocery stores in Tehran found large jumps from February, before the war began: Chicken and lamb were up 45%, rice 31% and eggs 60%.<\/p>\n

Iranian authorities have announced measures to help Iranians bear the crippling prices. But many of these policies \u2014 including a 60% hike in the minimum wage and coupon programs for essential goods \u2014 are stoking inflation, Taymur Rahmani, an economist at the University of Tehran, wrote recently in a leading business newspaper, Dunya-ye Eqtesad.<\/p>\n

Since the war began, free bus and metro fares in the capital are also not helping the city\u2019s struggling taxi drivers.<\/p>\n

Another driver waiting nearby, Mohammad Deljoo, 73, said he was supporting his family of two children on a daily income of $4. He said there was no shortage of goods in shops and instead blamed the problem on \u201cprice gouging.\u201d<\/p>\n

\u201cWe only buy what\u2019s absolutely necessary, things like bread and potatoes. Even eggs have become too expensive for us,\u201d Deljoo said. He said the price for tires and other car parts rose fivefold in less than a year.<\/p>\n

\u201cOne price today, another tomorrow. How is that possible?\u201d he said.<\/p>\n

Amid job losses, many Iranians are scrambling to find new ways to make money. Ali Asghar Nahardani, 32, said the ride-hailing app he works for had not paid him in over a month. He turned to street vending to cover his living expenses.<\/p>\n

\u201cWe\u2019re just living day by day, trying to get through this situation while the war conditions continue,\u201d he said.<\/p>\n

War contributes to collapse of Iranian middle class<\/p>\n

The closure of the strait has hiked energy prices across the world. But in Iran, the war has marked another step in the ruin of a once large and prosperous middle class following decades of sanctions.<\/p>\n

By 2019, Iran\u2019s middle class had already shrunk to around 55% of the population, explained Mohammad Farzanegan, a professor of Middle Eastern economics at the University of Marburg. New rounds of sanctions as well as wars, corruption and economic mismanagement have further cut that number, he said.<\/p>\n

The war will likely push several million Iranians below the poverty line, according to a report published by the U.N.’s development agency in late March.<\/p>\n

A physical trainer who lives in downtown Tehran described the economic crisis as a mental health crisis for Iranian society. She said many of her clients could no longer afford her fees and training sessions. The few clients she has left have turned to discussing ways to handle signs of depression.<\/p>\n

\u201cThe system is just collapsing. The layoffs are in factories, in companies, in startups, in whatever your work is,\u201d she said in a voice note by Telegram. She spoke on condition of anonymity out of security fears.<\/p>\n

The trainer said she had severely cut back on groceries.<\/p>\n

\u201cThe last time I bought meat was about two months ago.\u201d She has also given up paying for therapy sessions that she began after divorcing her spouse a year ago. \u201cI am pursuing a master\u2019s in psychology so it\u2019s given me the tools to handle my anxieties,\u201d she said.<\/p>\n

A resident of Karaj, near the capital, said his insurance company had seen plummeting sales for car and home policies. Families are being dragged down into poverty, he said, also speaking on condition of anonymity out of fear of reprisal.<\/p>\n

The Karaj resident, who joined the mass anti-government protests in January, blamed the yearslong decline on \u201csevere systemic corruption\u201d and the Islamic Republic\u2019s costly support for militant groups in Lebanon, Yemen and Iraq.<\/p>\n

\u201cMost people blame the government and its ambitions,\u201d he wrote by WhatsApp message.<\/p>\n

Leaders urge public to endure<\/p>\n

Iran\u2019s leaders have been trying to shore up the homefront by showing sympathy while also urging the public to endure the economic pain for the sake of the war effort.<\/p>\n

In a series of messages on his official Telegram channel Friday, the new supreme leader, Mojtaba Khamenei, described the current phase of the conflict as an \u201ceconomic battlefield\u201d and asked employers to \u201cavoid layoffs as much as possible.\u201d Khamenei is believed to have been wounded early in the war by Israeli strikes and has yet to appear in public.<\/p>\n

Parliament speaker Mohammad Bagher Qalibaf \u2014 who has emerged as a key player in the war effort and U.S. talks \u2014 urged Iranians to \u201cbe frugal\u201d in their spending. He said on his official Telegram account that government administrators and the public \u201chave a duty to help each other\u201d to ease economic effects.<\/p>\n

The U.S. blockade has restricted Iran\u2019s critical Gulf trade. Over 90% of Iranian trade, particularly the oil exports that bring in billions of dollars, flows through its southern ports, Farzanegan estimated.<\/p>\n

Farmani, the taxi driver, said he did not want to accept what he called a \u201chumiliating\u201d peace with the U.S. and Israel.<\/p>\n

\u201cA country that has sacrificed so many martyrs and has so many people willing to give their lives cannot simply let others from across the world dictate terms to us.\u201d<\/p>\n

___<\/p>\n

Radjy reported from Cairo. Associated Press writer Nasser Karimi contributed to this report.<\/p>\n","protected":false},"excerpt":{"rendered":"TEHRAN, Iran (AP) \u2014 Iran\u2019s grip on the Strait of Hormuz is throttling the world\u2019s energy supplies and…\n","protected":false},"author":2,"featured_media":111478,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[719,2371,38401,24308,328,1003,2446,147,197,1004,1445,34,61,196,30949,5637,38402,38400,26880,2081,5995,32204,323,82],"class_list":{"0":"post-111477","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-2024-2025-mideast-wars","9":"tag-2024-2026-mideast-wars","10":"tag-ali-asghar-nahardani","11":"tag-blockades","12":"tag-business","13":"tag-consumer-prices","14":"tag-economic-indicators","15":"tag-economy","16":"tag-general-news","17":"tag-inflation","18":"tag-internet","19":"tag-iran","20":"tag-iran-government","21":"tag-iran-war","22":"tag-jobs-and-careers","23":"tag-mohammad-bagher-qalibaf","24":"tag-mohammad-deljoo","25":"tag-mohammad-farzanegan","26":"tag-poverty","27":"tag-strikes","28":"tag-telegram","29":"tag-u-s-government-shutdown","30":"tag-united-states-government","31":"tag-world-news"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116566449390874028","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/111477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=111477"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/111477\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/111478"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=111477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=111477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=111477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}