Iranians Cut Essentials as Inflation Hits 66% Amid Renewed War

Mahzad Azari, a 21-year-old shop employee in Tehran, now routinely weighs one necessity against another: eating versus commuting, replacing her eyeglass lenses versus paying for English lessons. Her choices mirror those of countless Iranians enduring acute economic strain more than five months into renewed hostilities with the United States.

The Iranian economy—already weakened by decades of international sanctions—faces mounting pressure, while a permanent cessation of hostilities remains out of reach.

Azari works at the Grand Tajrish Bazaar in the capital. She explains that each ceasefire announcement briefly lifts market activity, only for the cycle to restart when fighting resumes or a new area is bombed.

“I have to deprive myself of something to afford something else,” she says.

Speaking to Agence France-Presse, she adds: “If I use the Snapp! ride-hailing app one day, I won’t be able to buy lunch that day. If I replace my lenses, I won’t be able to continue my English classes.”

Fahimeh, a 29-year-old dual-job employee who declined to disclose her family name for security reasons, shares the same hardship. “I used to enjoy going to the cinema, dining out, or ordering Italian takeout—but everything has become about survival since then.”

War timeline and economic indicators

U.S. and Israeli military operations against Iran began on 28 February. A ceasefire took effect in April, followed by a memorandum of understanding signed in June. Hostilities resumed in July.

Annual inflation reached 66% on 22 July, up from 46% in February.

The Iranian rial continues to depreciate: the U.S. dollar traded at 1.88 million rials on Wednesday, compared to 1.65 million rials just before the war began.

Chronic crisis and “resistance economy”

Iran’s economy has suffered chronic hyperinflation and steep local currency depreciation for years, driven largely by sanctions targeting the Islamic Republic—especially its nuclear program.

This erosion of purchasing power intensified sharply over recent months, triggering widespread protests in December.

Diplomatic developments in spring briefly revived hopes for improvement—hopes dashed by the resumption of combat operations.

In a May message, newly appointed Supreme Leader Mojtaba Khamenei urged companies not to lay off staff and called on lawmakers to pass measures supporting the “resistance economy” to ease household pressures.

The late Supreme Leader Ali Khamenei—who was assassinated on the first day of the war—first introduced the term “resistance economy” in 2010, defining it as reducing dependence on external actors.

Living standards in freefall

Tehran-based economist Behnam Samadi observes that “the Iranian economy has adapted to many crises and developed resilience—but that resilience comes at a cost.”

He notes declining household purchasing power, rising corporate burdens, and increased government public spending aimed solely at sustaining basic national functionality.

“The key question is: how long can this endurance last?” he asks.

To cope, some institutions now offer installment plans for consumer purchases and medical expenses.

Samadi warns such arrangements merely “buy time,” stressing that “living standards are deteriorating significantly.”

Davoud, a 23-year-old fruit and vegetable vendor, can no longer afford even short trips outside the capital. “We used to go sometimes with friends to northern Iran—but now we literally cannot go anywhere.”

Ehsan, a Tehran grocer, reports shrinking shopping baskets month after month. “People’s meals are getting smaller and smaller—even for staple food items.”

Major expenditures are being postponed indefinitely.

Amir Reza, also 23, states: “All our dreams—buying a home, buying a car—are moving further away every day.”