Soaring inflation, rent and food costs, internet shutdowns and infrastructure damage are worsening daily life as the rial hovers above 1.9 million per dollar.
Iran’s economic crisis is deepening as the rial hovers above 1.9 million per dollar, inflation nears 90% and war damage, internet disruptions and infrastructure strain compound pressure on households and businesses. The currency had earlier fallen to a record 1.95 million per dollar on July 19 and remained near those lows on Tuesday. Daily life has become more difficult across the country. Pensioners and workers face collapsing purchasing power, steep rent increases, more expensive food and medicine, banking disruptions and recurring electricity cuts. Last month’s inflation was nearly 90% from a year earlier, while food inflation reached 134%. Controlled bread prices in Tehran were nearly doubled by the government last month. The broader economy was already under strain from sanctions and longstanding structural weaknesses before the war began in February. Since then, the damage has widened as the US and Israel bombed ports, airports, bridges, roads, oil and gas facilities, petrochemical plants, steel producers, power stations and water facilities. Earlier official estimates put war losses at $270 billion in April, while the latest report said damage was already running in the hundreds of billions of dollars. The conflict’s effects have spread beyond prices and currency markets. Blackouts have persisted during summer heat above 40 degrees Celsius in parts of the country, contributing to water shortages in some provinces. Major cyberattacks last month disrupted banking services, loan support has been slow or inadequate, and unemployment insurance has failed to cover many informal and digital workers. Iran also imposed a three-month shutdown of access to the global internet during the current war, with only some access restored in late May. Analysts previously cited in the coverage said the economic damage is extraordinary but may not alter Tehran’s war posture. Javad Salehi-Isfahani said the government is trying to preserve living standards while preventing inflation from tipping into hyperinflation, and President Masoud Pezeshkian said economic pressure could erode military gains if public anger intensifies.