Iranians Have 'Become Poor' As War Shatters Already Reeling Economy

RFE
03 Jun 2026, 20:13 GMT+10

Masud has been forced to sell off his household appliances in order to survive Iran's deepening economic crisis.

The United States and Israel's bombing campaign has left much of Iran's infrastructure and industries in tatters, fueling runaway inflation and joblessness.

"We have sold our furniture just to get by," Masud, a resident of the capital Tehran, told RFE/RL's Radio Farda using a pseudonym for fear of retribution. "We gathered electrical appliances from the house, took carpets and things like that, and sold them."

Masud, who is now unemployed, also makes sandwiches at home to sell on the Tehran subway.

"I took my juicer and sold it just to pay the electricity, phone, and building maintenance bills," he said.

'Running Out Of Money'

Masud is not alone. Millions of Iranians are grappling with the economic fallout from the three-month-long war.

Years of international sanctions and government mismanagement had already crippled Iran's economy. Now, the country of 90 million people is confronting a complete economic collapse.

"People are worried about running out of money," Tehran-based economist Javad Rahimpour told Radio Farda. "Many are eating into their savings. You can see it on the street level: Movement has decreased and incomes have fallen."

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Even as unemployment has increased, the prices of basic food items, medication, and utilities have soared.

Masud, the Tehran resident, said a course of spinal injections that cost up to 80 million rials ($47) a year ago is now 400 million rials ($234) -- a sixfold increase.

His monthly mobile phone bill has jumped from 300,000 rials (about $18 US cents) to 1.7 million rials ($1) and his electricity bill went from 1.2 million rials (about $0.70) to 6 million rials (around $3.50).

"We have all become poor," he said. "Those of us who were once middle class, or a little above it, are now financially destitute."

Gholamhossein Mohammadi, a deputy labor minister, said in April that, according to government estimates, the war had resulted in the loss of 1 million jobs and the direct or indirect unemployment of 2 million people.

In March, the cost of foodsurgedby 110 percent compared to the same month in 2025.

The collapse in purchasing power has rippled through the economy.

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A woman who owns a restaurant near Iran's Caspian Sea coastline, a popular weekend destination for people from Tehran, said business has dried up over the course of the conflict. Thousands of people fled to the area after the US-Israeli bombing campaign began on February 28.

"The first week or two, it was very busy. People came north with whatever savings they still had," she told Radio Farda. "But slowly, the number of customers decreased. Families of three or four would come in, check the prices, and leave. Or they would order a meal for two and share it."

Her restaurant employed 10 people before the war. Now, the staff is down to three. Many other businesses in the area, she said, have shut down entirely.

"I just hope we can hold on," she said. "I honestly don't know if continuing is even possible."

US Economic Pressure

During the current conflict, the United States and Israel have intensified economic pressure on Iran.

US and Israeli air strikes destroyed or damaged the country's key energy and transport infrastructure, including bridges, roads, and oil and gas depots.

Key industries, including manufacturing, were also targeted, disrupting domestic production and hiking prices for basic food items.

On April 13, the United States imposed a naval blockade on Iranian ports and vessels, disrupting Iran's oil exports, the lifeline of its economy.

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The US embargo came in response to Iran seizing control of the Strait of Hormuz, a key artery for global oil and gas supplies, at the start of the war. By threatening and attacking international shipping, Iran brought maritime traffic to a virtual standstill, rattling international energy markets and upending the global economy.

The targeting and destruction of Iran's key industries have angered many Iranians.

Among the targets was Mobarakeh Steel, one of Iran's largest industrial facilities with ties to the Islamic Revolutionary Guards Corps (IRGC). Targeted several times by air strikes, the facility halted production completely in April.

"Even without sanctions, I don't think Mobarakeh could get back to where it was in 10 or 20 years," the female restaurant owner said, adding that attacks on the country's industrial base have left a "lasting wound."

Internet Blackout As Economic Weapon

Compounding the economic impact of the war was Iran's decision to impose a monthslong Internet shutdown, one of the longest in modern history.

For 88 days, millions of Iranians lived in digital darkness. But the blackout, which ended on May 26, also inflicted a steep economic toll.

Afshin Kolahi, an official from Iran's Chamber of Commerce, said during an April 12 session that the shutdown was costing the country up to $40 million per day. Indirect losses, he said, were up to $80 million each day.

"Many people who earned their income online lost everything when the Internet was cut," said Masud, adding that he was among them. "Their income went down to zero."

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The deadly mass protests that erupted in January were sparked by economic grievances before evolving into demonstrations against Iran's clerical rulers.

"The level of economic discontent is very high. It is not the kind of thing that can be concealed by words or writing," said Rahimpour, the Tehran-based economist.

"The conditions for protests may not currently exist," he said. "But that should not lead us to think there is some kind of convergence between the state and the people."

The alarm, he said, had already been sounded.

"People are extremely worried across multiple fronts. Their costs have risen, they are losing opportunities, and their investments in their children's futures have been put at risk," he said.

Iranians Have 'Become Poor' As War Shatters Already Reeling Economy