As the conflict with the US and Israel continues, Iran’s economy is facing mounting strain, with rising prices, job losses and currency instability affecting daily life across the country. Businesses, markets and households are grappling with uncertainty as the economic impact of the war intensifies.
Consumers in Iran are paying significantly more for a wide range of goods, including food, medicine, vehicles, electronics and petrochemical products. The increase was evident at the start of the working week, with prices noticeably higher than the previous week, according to state TV.
A combination of domestic mismanagement, damage to infrastructure from bombardment , US sanctions, a naval blockade and an ongoing internet shutdown—now in its 64th day—has added to the pressure on the economy of more than 90 million people.
Currency hits record low
The national currency, the rial, has dropped to a record low of 1.84 million against the US dollar in Tehran’s open market. Trading activity has remained limited due to volatility, while uncertainty has spread across other sectors, leaving buyers and sellers unsure about future pricing and supply.
With supplies disrupted or reduced, some vendors have sharply increased prices. A 256GB iPhone 17 Pro Max, priced at $1,200 in the US, is being sold for close to 5 billion rials ($2,750) in Tehran, while some sellers have stopped offering it altogether.
Similarly, a Peugeot 206, widely used in Iran, now costs about 30 billion rials ($16,500). Imported vehicles are even scarcer and are being sold at significantly higher prices, sometimes more than five times their cost in neighbouring markets such as the United Arab Emirates.
State television reported “daily” increases in car prices, attributing them to “psychological” factors and “fake prices” set by sellers seeking to benefit from market instability.
Wages struggle to keep pace
The monthly minimum wage stands at less than 170 million rials ($92), even after a roughly 60 per cent increase for the current Persian calendar year beginning March 21. Government subsidies for essential goods amount to just under $10 per person each month.
While the government of President Masoud Pezeshkian has not released official figures, layoffs have been reported across sectors, from technology firms in Tehran to major industrial producers in Isfahan. Many businesses have either reduced operations or suspended activities, reported Al Jazeera.