Deepening poverty, rising household debt, rampant inflation, and hidden unemployment.
Iranian economic indicators show that the crisis is deepening on many fronts, and at least one official news outlet is not shy about reporting it.
On Sunday, US President Donald Trump made it clear that inflicting economic pain on Iran is part of the US government’s strategy.
“We’re only semi-negotiating (with Iran). We’re just looking at the fact that Iran has huge inflation and no money,” he said.
The current state of Iran’s economy suggests that the calculations may not be wrong.
According to the Iranian Labor News Agency (ILNA), “workers always feel indebted to everyone and everything.”
Hossein, a 35-year-old who lives with his family in Tehran, told authorities that he uses “credit apps” for his daily commute and to buy small meals.
President Masoud Pezeshkian has frequently warned about the social consequences of Iran’s economic collapse, and even state media has acknowledged the risk of renewed social unrest.
As long as inflation, unemployment, declining purchasing power and feelings of inequality persist, “social dissatisfaction will continue to be reproduced,” state news agency IRNA reported last month.
Government statistics show that revenues have certainly not kept pace with inflation. Food inflation has soared nearly 130% over the past 12 months. Wages for low-wage workers have grown by less than half that amount.
The government has recently warned that it could cause further pain by cutting petrol subsidies, which could trigger a new wave of inflation and potentially lead to higher unemployment.
Gasoline price increases have sparked protests in the past.
“Our economy today is like a patient suffering from a severe hemorrhage,” said Albert Baghjian, professor of economics at Tehran University. “Introducing a gasoline shock is tantamount to dealing a fatal blow to livelihoods,” he told ILNA.
The International Monetary Fund predicts Iran’s economy will contract by 6% this year, mainly due to production losses and physical damage caused by the conflict. Relative to the size of the national economy, this figure represents an enormous destruction of wealth and livelihoods.
Analysts say that even if the dispute with the United States is quickly resolved, it will take months for better economic conditions to reflect.
According to think tank Eurasia Group, Iran could secure “up to $20 billion in frozen assets, $8 billion a year from U.S. oil marketing licenses, and $5 billion to $10 billion a year from Strait of Hormuz fees.”
However, “there is a serious risk with any revenue source that the U.S. government may shut down the revenue source as they have done before,” Eurasia added.
Meanwhile, as the war intensifies, the cost of survival for millions of Iranians will only increase.
“Purchasing food and medicine in installments is no longer a sign of welfare, but a warning of a deep crisis,” ILNA reported this month.
Essentially, people have economic problems going into the future.
A 29-year-old part-time editor in Tehran told ILNA that he uses dozens of microcredit apps “because I can’t afford to pay everything at once.”
Other workers told ILNA that 40% of their wages go toward rent and an additional 40% toward credit installments.
ILNA said the use of credit apps is also increasing among students facing “uncertain job prospects (and) unstable incomes.”
Additionally, app users will be subject to fines and fees if they fail to meet repayment deadlines.
“These fines keep accumulating. The fear of not having money and missing installments is what really makes people suffer,” Hossein told ILNA.
Many Iranians are on temporary contracts or move back and forth between jobs, making them even less likely to continue making repayments. Workers who spoke to ILNA said that few have health insurance, and medical problems can result in loss of income.
Thousands of people are moving to cheaper accommodation on the outskirts of cities, partly due to soaring rent prices.
According to official data, the cost of building homes has doubled in the past year, and this has spilled over into the rental market. Some local governments have tried to limit rent increases to 27% in Tehran province, but these limits are often ignored.
Another semi-official news agency, ISNA, reported that “rents continue to rise, construction costs soar, purchasing power declines and housing transactions remain depressed.”
Labor groups claim the government has forgotten them during the war.
“Iranian workers, especially construction workers, have been forgotten and left vulnerable to the whims of fate,” said Hassan Ezzati, president of the Spring Construction Workers Trade Association.
“Their efforts are focused on one thing: staying alive.”
Ezzati estimated that half of the construction workers in Spring, near Tehran, do not have health insurance. Some, so desperate for money, chose to work as kolbari, smuggling people across the Iranian border, sometimes through minefields, during the 10-year Iran-Iraq war in the 1980s.
Perhaps the Trump administration believes that economic despair is a more powerful means of forcing Iran to compromise than missiles or bombs.
As negotiations over the Strait of Hormuz drag on, the White House appears to believe that time and Iran’s economic deterioration are on its side.
U.S. Treasury Secretary Scott Bessent said last week that Iran’s influence in the Strait of Hormuz will weaken over time as other countries build pipelines to circumvent the choke point.
Israel’s far-right Finance Minister Bezalel Smotrich has argued that destroying Iran’s economy would be the most effective route to overthrowing the regime.
The United States has significant economic influence over Iran through sanctions and the ability to prevent or limit the release of frozen foreign assets.
Eurasia concluded that “the proceeds from the deal will ease fiscal pressures, but political control will remain dependent on force, as it will not fully address the population’s deep-seated economic grievances.”
The announced 2026 budget has already reduced real spending by 38%.
There is one bright spot. That is oil export. This year’s budget targets exports of 1.77 million barrels per day (bpd) at $55 per barrel. Exports to date have averaged 1.6 million barrels per day at prices in the low $80s.
That sign of hope may not last long if the US naval blockade continues. According to shipping data, no oil has been exported from Kharg Island since the end of July.
The irony is not lost on labor activist Hassan Ezzati.
“In a country rich in natural resources both above and below ground, the story of the lives of workers is a record of endless suffering,” he told ILNA.
