Iranians struggle to get by amid US war and domestic woes

Iranians continue to grapple with severe economic hardship as the nation faces the dual pressures of a protracted war with the United States and Israel, alongside longstanding domestic challenges. In western Tehran, Leyla, a pensioner, finds herself increasingly burdened by rising living costs. Her recent monthly pension of 180 million rials, about $94—was increased by 40 percent from the previous year, yet it barely covers basic necessities. A simple tub of ice cream and yogurt now costs her approximately 10 million rials, or just over $5, highlighting the sharp erosion of purchasing power. The situation reflects broader systemic struggles within Iran's economy, exacerbated by a war initiated by the U.S. and Israel in February, following a brief but intense conflict with Israel in early 2024. These conflicts have compounded existing economic vulnerabilities, leading to widespread difficulties in accessing affordable food, housing, and essential services. Masoud, a young resident of Tehran, described how his landlord agreed to a rent hike of nearly 50 percent, forcing him to consider relocating or accepting higher costs. Despite government-imposed limits of 27 percent for Tehran and 25 percent for other provinces, these caps are frequently exceeded in practice, leaving many residents trapped in a cycle of financial strain. The impact extends beyond housing. Inflation reached nearly 90 percent last month, with food prices surging by 134 percent compared to the previous year. The Iranian rial has plummeted to record lows, trading at over 1.9 million to the U.S. dollar. Government efforts to stabilize the economy include controlled pricing for bread, which saw a doubling in official rates last month. However, such measures have had limited success, and local reports suggest that petrol prices may rise again soon after a recent adjustment. Support mechanisms, such as monthly cash subsidies and electronic food coupons, remain insufficient. These benefits, valued at only a few dollars, are often rejected by retailers who claim they have not been adequately reimbursed by the government. Meanwhile, experts note that business loans have been allocated slowly or inadequately, while individuals and enterprises have received minimal relief from outstanding debts due to ongoing banking disruptions caused by cyberattacks. Unemployment insurance, which has seen a spike in applications, fails to cover many informal and digital workers, further deepening economic insecurity. The country’s recovery from nationwide protests in January has been hindered by the ongoing war and additional challenges. During both the protest-related unrest and the current conflict, the Islamic Republic has restricted internet access, with the latest shutdown lasting three months, the longest ever recorded. Although partial restoration occurred in late May, Iran’s internet remains among the slowest and most censored globally. Structural weaknesses in the economy, including years of Western sanctions and internal mismanagement, have been further eroded by the war’s toll. The damage from the conflict has intensified pre-existing problems, creating a complex web of economic distress. As the situation deteriorates, the outlook for ordinary citizens grows increasingly bleak, with many fearing that the coming year will bring even greater hardships.