Iran's Economy Strangled by War, Unemployment Rises - Everything Becomes Expensive
Prices of various necessities in Iran have surged sharply amid the impact of the war with the United States (US) and Israel. This prolonged conflict has not only triggered high inflation but also caused millions of jobs to be lost or halted.
Earlier this week, prices of food, medicines, cars, electrical appliances, and petrochemical products were reported to have risen significantly compared to the previous week. This situation is worsened by a combination of domestic mismanagement, attacks on infrastructure, US sanctions, sea blockades, and near-total internet blackouts that have lasted for 64 days in Tehran.
The value of the Iranian currency, the rial, has also plunged to an all-time low in the open market, at 1.84 million rials per US dollar. This figure reflects a sharp weakening of the public’s purchasing power.
Market uncertainty has caused trading activities to stall. Many business actors and consumers are choosing to hold back on transactions due to fears that prices will continue to fluctuate and supplies of goods will not be guaranteed.
Several items have even experienced extreme price hikes. The iPhone 17 Pro Max 256GB, priced at US$1,200 (approximately Rp20.4 million) in the United States, is now sold for nearly 5 billion rials or about US$2,750 (Rp46.75 million) in Tehran. Some shops are even refusing to sell the product due to price uncertainty.
Meanwhile, the locally produced Peugeot 206 car now reaches a price of 30 billion rials or about US$16,500 (Rp280.5 million). Imported cars are increasingly scarce and sold for more than five times the price in neighbouring countries like the United Arab Emirates.
Government media acknowledge daily price increases in the automotive market but attribute the main causes to “psychological” factors and “fake pricing” practices by traders.
On the other hand, economic pressure is deeply felt by the public. The current monthly minimum wage is less than 170 million rials or about US$92 (Rp1.56 million), despite an increase of around 60% since last March. The government also provides subsidies for basic necessities of less than US$10 per month per person (approximately Rp170,000).
“You look at the prices and salaries, and you see the numbers don’t match,” said a Tehran resident who declined to be named, as quoted by Al Jazeera on Sunday (3/5/2026).
“There’s not much you can do except convert a little of what you have into something that doesn’t depreciate in value or buy something you need that you might not be able to afford later,” he added.
President Masoud Pezeshkian’s government has not detailed the number of workers who have lost income. However, reports indicate that many companies, from the technology sector in Tehran to the steel industry in Isfahan, are carrying out layoffs.
In his official statement, Iran’s Supreme Leader Mojtaba Khamenei stated that the country must be able to defeat its enemies not only on the military battlefield but also in the economic and cultural spheres.
He also urged companies to refrain from layoffs. “Iran is on the path to the peak of progress and development,” he said.