Soaring cost of food and other staples squeezes Iranians as threat of US attack looms

Economic Crisis Deepens in Iran as Sanctions and War Fears Intensify

Iranians are facing an increasingly desperate economic situation as runaway inflation and a rapidly depreciating currency have made basic necessities unaffordable for many. The deteriorating economic conditions have added to the mounting pressure on citizens already concerned about possible military conflict with the United States and still reeling from nationwide protests that swept the country last month.

“Everybody is under pressure: merchants, civil servants, laborers,” said Ebrahim Momeni, a 52-year-old retired civil servant. “The weaker class of people is being crushed.”

Iran’s economy has long suffered from a combination of international sanctions and domestic mismanagement. The country experienced temporary relief following the 2015 nuclear deal that lifted many sanctions, but the situation deteriorated sharply after U.S. President Donald Trump withdrew from the agreement in 2018 and reimposed a “maximum pressure” campaign.

The economic stranglehold tightened further this week when the Trump administration imposed new sanctions on 30 entities accused of enabling Iran’s production of ballistic missiles, drones, and facilitating illicit oil sales.

The Iranian currency, the rial, has collapsed to unprecedented levels. From trading at approximately 32,000 to the dollar when the nuclear deal was signed in 2015, it has plummeted to 1.65 million to the dollar this week—a historic low exacerbated by fears of potential U.S. military action.

With inflation surpassing 46% compared to January last year, economists warn of a dangerous cycle of higher prices and reduced purchasing power that could plague the Iranian economy for years. The deteriorating economic situation was one of the primary catalysts for protests that began in Tehran’s main bazaar in late December before spreading nationwide.

The impact on everyday Iranians has been severe. Momeni, who earns about 700 million rials (approximately $540) monthly, described how the price of a kilogram of red meat jumped from 13 million rials to 22 million rials in just one month. During the same period, milk prices doubled, and pasta prices increased by nearly 70%.

“Those with lower incomes and fixed salaries are suffering because of the price hikes,” said Farhad Panahirad, a 44-year-old taxi driver who, together with his wife, earns about 600 million rials (roughly $460) per month.

Iranians have developed various coping strategies to deal with the financial strain. Many check social media daily to track price changes or shop at night when produce is sometimes marked down to half price before it spoils. Some are stockpiling emergency supplies in anticipation of potential conflict.

“I am not happy to buy this much stuff, but my wife said we had to be prepared for uncertainty in the coming days,” said Saeed Ebrahimi, a 43-year-old electrical technician and father of two who has been purchasing bulk amounts of beans, bread, rice, and canned food despite the high prices.

The economic crisis extends beyond food to durable goods as well. According to Iranian media reports, prices for appliances such as washing machines, vacuum cleaners, and refrigerators have doubled.

Tehran-based economist Farbod Molavi attributes the price increases to market uncertainty and rising costs of raw materials. The country faces both recession and high unemployment, which officially stands at 7.8% overall but reaches as high as 20% among young people. With approximately 24 million Iranians between the ages of 15 and 34, the situation presents significant social and economic challenges.

The Iranian government has attempted to mitigate the suffering by distributing monthly payments of 10 million rials to approximately 75% of the population for food purchases, with promises to increase these payments if prices continue to rise.

However, relief seems unlikely in the near term. President Trump has threatened strikes if Iran doesn’t agree to a new nuclear accord, backing his threats with the largest buildup of warships and aircraft in the region in decades. Though negotiations are ongoing, with a third round expected in Geneva, many Iranians remain pessimistic.

“Wherever you go now people are talking about war. If you go to a bakery to buy bread you see people talking about war,” said Momeni. “This state of limbo is worse than war.”