The economic situation in Iran is dire, with deepening poverty, rising household debt, and rampant inflation. US President Donald Trump has made it clear that inflicting economic pain on Iran is part of Washington’s strategy.
Economic Crisis
The state of Iran’s economy suggests that this calculation may not be misplaced. Workers are struggling to make ends meet, with many relying on credit apps to get by. The government has warned of the social consequences of the economic meltdown, and state media has acknowledged the risk of renewed social unrest.
The rate of inflation for food has soared by nearly 130% over the past 12 months, while the wages of low-paid workers have grown by less than half of that. The government has recently warned that it may add to the pain by reducing gasoline subsidies, which would trigger a new wave of inflation and potentially lead to higher unemployment.
International Pressure
The International Monetary Fund has projected that the Iranian economy will shrink 6% this year, largely due to lost output and physical damage caused by the conflict. The US has huge economic leverage over Iran through sanctions and the ability to block or limit the release of its frozen overseas assets.
US Treasury Secretary Scott Bessent has said that over time, Iran’s leverage in the Strait of Hormuz would erode as other countries build pipelines to avoid the chokepoint. Israel’s far-right Finance Minister, Bezalel Smotrich, has argued that destroying Iran’s economy offers the most effective route towards overthrowing the regime.
Original reporting: KTVZ (Central Oregon) — read the source article.
