Iran is grappling with deepening economic hardship as inflation—already nearing 50 percent before recent conflict—continues to rise under the combined pressure of war and sanctions.
Prices of essential goods, including food, medicine, and household items, have surged sharply across the country. Residents report rapid increases, with some everyday food items jumping from 700,000 rials to 1,000,000 rials within a short period. The cost of critical medications has also skyrocketed, with one cancer treatment reportedly rising from about three million rials to as high as 180 million.
Businesses are increasingly passing costs onto consumers. In central Tehran, some cafés have raised prices by as much as 25 percent in a single day, while imported goods in other regions have reportedly tripled in price.
The crisis has been worsened by the continued weakening of the Iranian rial. In response, the central bank has introduced higher-denomination banknotes, including a ten-million rial note, reflecting the currency’s declining value.
Economic strain has triggered widespread job losses, with many businesses shutting down or scaling back operations. The construction sector has slowed significantly, forcing workers—including migrants from neighbouring Afghanistan—to leave in search of better opportunities.
Internet disruptions have further complicated the situation, particularly for individuals and businesses that depend on online platforms, as prolonged communication blackouts have limited access to global networks.
Residents describe the situation as increasingly overwhelming, citing rising living costs, layoffs, and business closures. Key sectors such as steel, petrochemicals, and infrastructure have also been affected by the conflict, raising concerns about long-term recovery.
Experts warn that the country’s already fragile banking sector faces mounting risks. Adnan Mazarei noted that weak balance sheets and rising loan defaults could further destabilize the system. Previous failures, including the collapse of Ayandeh Bank, underscore the sector’s vulnerability.
With inflation recorded at 47.5 percent in February, analysts caution that further monetary expansion to support struggling banks could push inflation even higher, leaving the economic outlook uncertain for millions of households.