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Every day in Iran, shoppers are walking into stores to find prices rising, with some posting photos online showing shrinking contents of their carts. The mounting cost of living is coming as Iranians brace for a possible war with the United States and continue to deal with the aftermath of protests that swept the country last month, according to the Associated Press.
Ebrahim Momeni, a 52-year-old retired civil servant, said “Everybody is under pressure: merchants, civil servants, laborers,” and added, “The weaker class of people is being crushed.” He described the pressure as one weighing on the people most exposed to higher prices and reduced spending power.
The AP report said Iran’s cost crunch is occurring alongside long-running economic strain tied to international sanctions and government mismanagement, and it said the economy saw some relief after a 2015 nuclear deal lifted many sanctions. It added that the U.S. withdrew from that accord in 2018 under then-President Donald Trump, and that Trump revived a “maximum pressure” campaign after returning to office more than a year ago, including sanctions targeting Iran’s financial sector and energy exports.
On Wednesday, the Trump administration imposed new sanctions on 30 people and companies accused of enabling Iran’s production of ballistic missiles and drones and of enabling illicit oil sales. The report said those moves have helped accelerate the devaluation of Iran’s currency, the rial, with the exchange rate reaching a new low of 1.65 million rials to the dollar, as fears of a U.S. attack worsened.
Inflation has surged, the report said, surpassing 46% compared with January of the previous year. Economists cited in the report warned that the rial’s accelerating decline could feed a “vicious cycle” of higher prices and lower purchasing power, and they said double-digit inflation could persist for years in an economy also marked by high youth unemployment.
In markets, Iranians described coping strategies amid the price increases, including checking social media for updated prices and shopping at night when some produce may be marked down to clear out inventory before it spoils. The AP report also described people scrambling for emergency supplies that they believe could be needed if strikes occur, including flashlights, small gas ovens, and tape for securing windows against explosions.
Some families described dramatic short-term increases for staples. The report quoted Momeni as saying that he makes about 700 million rials (about $540) per month and that, in the past month, the cost of red meat rose from 13 million rials ($10) to 22 million rials ($17) per kilo. It said the same period saw milk rise from 520,000 rials to 1.1 million rials per liter and a box of pasta rise from 340,000 rials to 570,000 rials.
Farhad Panahirad, a 44-year-old taxi driver, said he and his wife together make about 600 million rials (about $460) per month and that lower-income people with fixed salaries are suffering because of the hikes. The report also quoted Saeed Ebrahimi, a 43-year-old electrical technician and father of two, saying he was not happy about buying bulk quantities but that his wife felt they needed to prepare for uncertainty in the coming days.
Beyond consumer goods, the report said even appliances such as washing machines, vacuum cleaners, and refrigerators have doubled in price, citing Iranian media. It added that the war outlook is affecting the economy directly by increasing uncertainty in the market and raising costs of raw materials, in an assessment by Tehran-based economist Farbod Molavi, who wrote in the independent Dona-e-Eghtesad newspaper.
The AP report said Iran is also confronting recession and unemployment, and that official data put unemployment at about 7.8% in October, up from 7.2% for the same period in 2024, with youth unemployment running as high as 20%. The report said the government began distributing payments of 10 million rials a month to some 70 million people—about 75% of the population—to spend on food in January, and it said officials promised to increase the payments if prices rise further.
The backdrop for the economic pressure is growing international concern over Iran’s nuclear program. The report said Trump has threatened strikes on Iran if the country does not agree to a new accord curtailing its nuclear program, and it said the U.S. has massed a large buildup of warships and aircraft in the region in decades. It added that the two sides have held two rounds of negotiations in recent weeks and that a third round was expected to be held in Geneva on Thursday.
Panahirad said he was pessimistic that negotiations would provide relief, describing the U.S. approach as bullying. Momeni, in the report’s final exchange, said people were talking about war wherever they went—adding, “This state of limbo is worse than war.”