After months of war, years of sanctions, and decades of mismanagement, the Iranian economy is facing a major squeeze.
IMF Predicts Major Inflation
Iran Army Tank. Image Credit: Creative Commons.
The International Monetary Fund (IMF) currently forecasts that Iran’s consumer-price inflation will average 68.9% this year.
Meanwhile, real GDP is set to shrink by 5.4%. The IMF also puts the country’s population at just short of 88 million. For these millions of ordinary people outside the regime’s corrupt networks, the price of food, in particular, is causing concern.
This week RFE/RL detailed how the average Iranian household has been forced to cut spending on food, medicine and utilities as prices soared.
One Tehran local told the news outlet that many people were now priced out of purchasing fruit and dairy products.
Another source claimed the price of 30 eggs had rocketed from 4 million rials to 5.7 million rials over the last week alone.
Naval Blockade Squeezes Export Cash
The ongoing American naval blockade has disrupted the transport of goods via Iran’s southern ports.
Vice chair of the Iranian Chamber of Commerce’s Import Management Committee, Davoud Rangi, told Eghtesad News this week that switching the cargo carried by a single ship would require around 2,500 trucks.
Rangi claims that between 400 and 500 ships ferry essential goods into Iran annually.
“At a small scale, perhaps one million tons of cargo a year could be brought in through Turkey or Pakistan, but 23 million tons, or even half of that, is simply inconceivable,” he explained.
Transporting goods overland would not only be more cumbersome but would also contribute to price pressures.
Tehran’s oil revenues are being hit hard, and this is part and parcel of Washington’s game plan to create “maximum pressure” on oil export revenue.
The Treasury already claimed back in May that it had stopped tens of billions of dollars in revenue from reaching Iran and its terror proxies across the region. 19FortyFive cannot verify that figure.
Iranian Regime Cautious Over Gas Price Hike
For years, cheap gasoline has cushioned some of Iran’s wider economic issues, including for normal people.
This status quo could be under threat.
In Iran’s southeastern Kerman Province, plans to impose higher gas prices were scrapped just hours before they were set to come into force on Thursday.
Iran International estimated that the plans would have meant that filling a 50-liter tank cost roughly one-fifth of a monthly salary at the upper end of the country’s wage range.
Decreasing fuel subsidies while purchasing power is in freefall is a dangerous game to play. In 2019, nationwide protests erupted in Iran when gas prices rose.
Food inflation is similarly worrying. Official Iranian data shows that prices for food and non-alcoholic beverages were about 134% higher in June 2026 than in June 2025. Oils and fats were up by a whopping 278%, while meat prices climbed 172%.
President Donald Trump’s administration has made clear its intention to pressure Iran economically.
Just this week, the Telegraph reported that Trump’s Treasury Secretary Scott Bessent had allegedly been given instructions to “destroy” Tehran’s currency.
Sanctions ‘Not Enough’
Some sanctions experts are not so certain this strategy is the best.
Kerri Bitsoff, a former official at the Treasury Department’s Office of Foreign Assets Control, told Iran International this week that sanctions alone will not work as a shortcut to toppling the regime.
“Sanctions can’t topple a regime on their own. Their impact, she argued, must be measured by how much they increase the costs of oil trading, weapons procurement, and other sanctioned activities.
Back in 2018, Washington reimplemented wide-ranging sanctions after exiting the 2015 nuclear deal.
On Thursday, U.S. Defense Secretary Pete Hegseth warned that Washington’s naval power could “indefinitely” blockade Iran by rotating its ships.
On Friday, Trump upped his rhetoric, claiming: “Pretty soon I’ll be declaring the Hormuz Strait a territory of the United States.”
“Essentially, that’s what it is. We have the blockade. No ships get through unless we want them to,” he went on.
Whether the war ends soon will ultimately determine whether Trump tests this bombastic claim.
About the Author: Georgia Gilholy
Georgia Gilholy is a journalist based in the United Kingdom who has been published in Newsweek, The Times of Israel, and the Spectator. Gilholy writes about international politics, culture, and education.
