Ordinary Iranians face spiraling prices for essential goods, mass job losses, and widespread business closures as the nation's economy strains under ongoing war and a U.S. naval blockade. The economic cost of the conflict and the blockade has been "very substantial and unprecedented," according to Hadi Kahalzadeh, an Iranian economist and research fellow at Brandeis University. This burden is directly passed to the working class through higher inflation, increased poverty, diminished services, and a significantly harder daily life.
Iran’s official statistics center reported in mid-April that annual inflation reached 53.7%, with food inflation breaching 115% compared to the same period last year. The rial currency has lost over half its value in the past year, plummeting to a record low of 1.9 million to the dollar at the end of last month. These economic conditions fueled massive protests that spread across the country in January.
Hossein Farmani, a 56-year-old taxi driver in central Tehran, noted that the price of tea has risen over 50% since the war began, alongside other staples like milk. Farmani stated, “If things keep heading in this direction, we’re going to suffer a lot more.” An Associated Press tour of Tehran grocery stores found significant price jumps from February, before the war, with chicken and lamb up 45%, rice 31%, and eggs 60%.
Mohammad Deljoo, a 73-year-old taxi driver, reported supporting his family of two children on a daily income of $4. He attributed the problem to “price gouging,” explaining, “We only buy what’s absolutely necessary, things like bread and potatoes. Even eggs have become too expensive for us.” Deljoo added that prices for tires and other car parts rose fivefold in less than a year, questioning, “One price today, another tomorrow. How is that possible?”
Amid widespread job losses, many Iranians are forced to find new means of survival. Ali Asghar Nahardani, 32, stated that the ride-hailing app he works for had not paid him in over a month, compelling him to turn to street vending to cover living expenses. Nahardani described the situation: “We’re just living day by day, trying to get through this situation while the war conditions continue.”
Workers Bear the Cost
A physical trainer in downtown Tehran described the economic crisis as a mental health crisis for Iranian society, noting that many of her clients could no longer afford her fees. The trainer, who spoke anonymously due to security fears, observed, “The system is just collapsing. The layoffs are in factories, in companies, in startups, in whatever your work is.” She reported severely cutting back on groceries, stating, “The last time I bought meat was about two months ago,” and had given up therapy sessions she began a year ago.
A resident of Karaj, near the capital, who joined the mass anti-government protests in January, reported plummeting sales for car and home insurance policies at his company. He stated that families are being dragged into poverty, blaming “severe systemic corruption” and the Islamic Republic’s costly support for militant groups. He added, “Most people blame the government and its ambitions.”
Professor Mohammad Farzanegan, a professor of Middle Eastern economics, explained that Iran’s middle class had already shrunk to around 55% of the population by 2019. He noted that new rounds of sanctions, wars, corruption, and economic mismanagement have further reduced this number. A report published by the U.N.'s development agency in late March indicated that the war would likely push several million Iranians below the poverty line.
The State's Role in Crisis Management
Iranian authorities have announced measures to help citizens bear the crippling prices, including a 60% hike in the minimum wage and coupon programs for essential goods. However, Taymur Rahmani, an economist at the University of Tehran, wrote recently that many of these policies are "stoking inflation." Free bus and metro fares in the capital, implemented since the war began, are also "not helping" the city’s struggling taxi drivers.
Iran’s new supreme leader, Mojtaba Khamenei, described the current phase of the conflict as an “economic battlefield” in messages sent on his official Telegram channel five days ago. He urged employers to “avoid layoffs as much as possible.” Parliament speaker Mohammad Bagher Qalibaf similarly urged Iranians to “be frugal” in their spending, stating on his official Telegram account that government administrators and the public “have a duty to help each other” to ease economic effects.
Imperialism's Economic Warfare
The U.S. naval blockade has severely restricted Iran’s critical Gulf trade, which accounts for over 90% of Iranian trade, including oil exports that generate billions of dollars, according to Farzanegan. While Iran’s grip on the Strait of Hormuz is throttling global energy supplies and inflicting economic pain worldwide, its own economy is simultaneously being dismantled by the blockade and war conditions.
The economic woes experienced by ordinary Iranians helped fuel the massive protests that spread across the country five months ago. Strike damage to key industries has also contributed to business closures and job losses. Despite the internal hardship, taxi driver Hossein Farmani stated his unwillingness to accept what he called a “humiliating” peace with the U.S. and Israel, asserting, “A 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.”