Iran鈥檚 economy was already struggling. The war has made it far worse.
| London
The economic agony felt by Iranians, after weeks of attacks by the United States and Israel, is measured in soaring prices, lost jobs, and an internet blackout that amplifies the uncertainty around what happens next.
鈥淲e are hearing that the war is going to resume; this unhinged U.S. president has no idea what exactly he wants,鈥� says Naimeh, a student counselor with green eyes and graying hair in Tehran鈥檚 middle-class Aryashahr district, who asked that only her first name be used. She and her husband have had to take second jobs just to get by.
When she finishes her school day, Naimeh starts work as a cashier at a corner shop, she explains. Her husband has a day job as an accountant, and at night, he drives a taxi.
Why We Wrote This
Even before the war, Iran鈥檚 economy was in trouble 鈥� fueling massive anti-regime protests that ended in a deadly crackdown. Now, ordinary Iranians are struggling, caught between a failing economy and a regime that鈥檚 even more determined to crush dissent.
鈥淲e were hoping for regime change, but [President Donald Trump] has only thrown us into further hardship,鈥� says Naimeh, in words that echo widely in Iran. 鈥淒id the war by any chance improve our lives? Not at all. My husband and I are working much harder these days to make ends meet, seriously, just to manage the groceries and bills.鈥�
President Trump said Monday that he had delayed a 鈥渧ery major attack鈥� against Iran planned for Tuesday. That would have ended an April 8 ceasefire, after appeals from Gulf leaders to give diplomacy more time to open the Strait of Hormuz and negotiate limits on Iran鈥檚 nuclear program.
The U.S. and Israel carried out strikes against thousands of targets in Iran, and since then, Iranians have scrambled to cope with the economic fallout.
While Americans are feeling the cost of the war against Iran in soaring gas prices 鈥� even as costs have also surged globally for fuel, transport, fertilizer, and food 鈥� Iranians are caught between severe economic challenges and a ruling regime that has now emerged more determined to resist its external enemies, and to control public discontent.
Even before the war, Iran鈥檚 economy was in tatters, battered by years of sanctions 鈥� Mr. Trump鈥檚 鈥渕aximum pressure鈥� campaign against Iran began during his first term 鈥� and mismanagement. But calls from the White House for Iranians to rise up and topple the Islamic Republic, following weeks of military assault by the U.S. and Israel, appear to be disconnected from the reality on the ground in Iran.
Nationwide anti-regime street protests in January were sparked by economic grievances. But they were put down by Iran鈥檚 security forces with lethal brutality, leaving more than 7,000 Iranians confirmed dead, and possibly thousands more.
鈥淚s the Iranian economy going to be able to sustain its recent performance in the wake of this war? The answer is plainly no,鈥� says Esfandyar Batmanghelidj, CEO of the Bourse & Bazaar Foundation, a London-based economic think tank.
鈥淭he physical damage to some key industrial infrastructure, petrochemical plants, steel plants, that is something that will have a real impact ... and the prolonged shutdown of the internet is going to have a dramatic impact,鈥� says Mr. Batmanghelidj.
But a shrinking economy does not mean Iran is unable to sustain another round of fighting against the U.S. and Israel.
鈥淵ou could have a much smaller Iranian economy in the coming year, but that could still be enough to furnish Iran鈥檚 leaders with the means they need to continue to harass shipping in the strait, or take the fight to the Americans, if Mr. Trump decides to resume the war,鈥� says Mr. Batmanghelidj.
He cites the example of Ukraine, which continues to defend itself against Russia鈥檚 2022 invasion, despite economic contraction of around 30%. And he notes that Venezuela鈥檚 former president, Nicol谩s Maduro, survived the most severe economic contraction in modern history 鈥� and was only removed by a U.S. Special Forces kidnap operation.
鈥淭he notion that economic hardship will necessarily destabilize the regime, it just doesn鈥檛 bear out,鈥� says Mr. Batmanghelidj. 鈥淎 lot of my research has been on how actually making Iranians poorer makes it more difficult for them to mobilize effectively against the state.鈥�
And as Iranians face the possibility of a renewed U.S.-Israeli military campaign, they are struggling to find coping mechanisms. Official data indicates a 174% increase in the price of Iranian rice, with edible oils up 375%. In March alone, inspections of 41,000 retail stores nationwide found that 12% resulted in judicial cases of price gouging and hoarding, according to the semiofficial Mehr News Agency.
Adding to the grim picture, Iran鈥檚 Ministry of Labor estimates that war-related job losses now top 2 million. Senior labor unionist Hamid Haj-Esmaili estimates the actual figure to be between 3 million and 4 million people out of work, and says there are no protection schemes for the newly unemployed.
鈥淪ince the war has broken out, prices have doubled, if not tripled,鈥� says a Tehran homemaker with a master鈥檚 degree in psychology and two children, who asked not to be named.
The accounts in this story are based on interviews with Iranians who agreed to speak with The Monitor on the condition of anonymity because they feared reprisals from the government for speaking openly about the economic challenges they are facing.
鈥淲hen we go to the supermarket, we no longer take a trolly, we just hold a bag, because we have to cut down on many essentials every time. ... Can you imagine that even the price of plastic bags has tripled, due to attacks on petrochemical sites?鈥�
鈥淲e are hanging in the balance; it鈥檚 getting worse and worse daily,鈥� she says. A friend who works at a daycare center was laid off, for example, along with two coworkers. At her beauty salon, she says, the owner had to let two staff members go.
鈥淚 cannot really imagine how those people will afford their lives at the current prices,鈥� says the homemaker, who says she survived a strike at an oil storage depot in west Tehran. The blast wave knocked her unconscious for half an hour, she says, and left a long crack in the living room wall. Leaking fuel poured through roadside canals for hours.
鈥淚 can鈥檛 really take this anymore. The state of constant fear and uncertainty is a living hell,鈥� says the homemaker. 鈥淲hether this regime collapses or not, we are condemned to suffering. ... If the war goes on, it is obviously a calamity; if the regime stays, suppression will be unprecedented under the military dictatorship.鈥�
Any U.S. or Israeli strikes on energy infrastructure 鈥� which Mr. Trump has explicitly threatened 鈥� could have 鈥渄angerous outcomes,鈥� says a power engineer who lives in the central Amirabad district of Tehran, and who asked not to be named.
鈥淎ttacks on power plants can trigger tragedies ... such as food scarcity and starvation in the long run,鈥� he says. 鈥淚t鈥檚 not about your phone battery dying. The domino effect ... could lead to enormous [numbers of] deaths. Is the regime preparing for such a scenario? Absolutely not.鈥�
Parliamentary speaker Mohammad Baqer Qalibaf 鈥� with whom the White House indirectly negotiated, via Pakistani mediators 鈥� blamed the 鈥渆nemy鈥� for economic pressure, and urged the public to 鈥渃ut down on consumption and expand charitable activities.鈥�
Economic concerns were even voiced at one pro-regime street rally. As a speaker was boasting about Iran closing the Strait of Hormuz, one young man stood up and challenged him.
鈥淪ir, the Strait of Hormuz better be loosened up, so the people鈥檚 pockets also get loosened up,鈥� he said, noting that 鈥渢he youth are under strain.鈥�
When the crowd laughed, he replied: 鈥淲hat鈥檚 funny about that? Isn鈥檛 any one of you under financial pressure? For 47 years, we have been suffering,鈥� the man said, referring to the 1979 founding of the Islamic Republic.
Iranian hardship is also acutely felt by an industrial engineer in Tehran, the father of a toddler, whose 鈥渓ifeline鈥� is petrochemical contracts, which are drying up.
鈥淢y business is on the verge,鈥� says the engineer, who asked not to be named. He recently sold off gold coins from his wife鈥檚 collection to pay several bills.
鈥淏ut there are more [bills] on the way. I cannot really sleep at night,鈥� says the engineer. 鈥淚f I lose my business, I will lose everything. I have built it over the years, working day in and day out. I can鈥檛 imagine that scenario, but it is very, very imminent.鈥�
An Iranian researcher contributed to this report.
