The Media Line: War-Stricken Economy Fuels Prospect of Renewed Protests as Citizens Say They Have Reached a ‘Breaking Point’ 

War-Stricken Economy Fuels Prospect of Renewed Protests as Citizens Say They Have Reached a ‘Breaking Point’ 

More than 40% of the population now lives below the absolute poverty line, with that figure exceeding 50% in the capital. Economists warn, however, that the real poverty rate may have climbed above 60% nationwide.  

By Omid Habibinia/The Media Line 

Iran’s already dying economy is now being pushed toward full collapse after several weeks of war. Food prices are rising not only day by day but hour by hour, with some staples increasing by at least 50 percent compared to pre-war levels. 

At the same time, the disruption of internet access has halted many services. Factories and production facilities are facing acute shortages of raw materials, and the country’s administrative system has been severely impaired. “It has become impossible to endure this situation any longer,” a Tehran resident told The Media Line.  

According to figures cited by state-affiliated institutions and some economists, more than 40% of the population now lives below the absolute poverty line, with that figure exceeding 50% in the capital. Economists warn, however, that the real poverty rate may have climbed above 60% nationwide. As the middle class erodes, the gap between those earning less than 50 million tomans per month (about $320) and those earning more than 200 million tomans per month (about $1,280) has widened sharply.  

However, across most occupations, the average monthly income of employees and skilled workers in Tehran does not exceed 25 million tomans (about $160), meaning that the majority fall below the poverty line, which economists say would require at least twice that amount to sustain a basic standard of living.  

This comes as the Persian New Year period—when Iranian households traditionally increase spending on food, clothing, and social gatherings—typically drives seasonal price spikes. This year, however, those pressures have intensified dramatically under wartime conditions.  

Last year,180 Iranian economists issued a statement warning of a looming economic breakdown driven by runaway inflation and monetary policies, particularly exchange-rate mechanisms that grant preferential access and rents to state-linked institutions, including the Islamic Revolutionary Guard Corps (IRGC).  

Government intervention in the currency market has failed to stabilize the exchange rate; instead, the US dollar nearly doubled in less than 7 months, triggering a sharp collapse of the national currency.  

The first shock of the war last summer destabilized Iran’s oil-dependent economy, and mounting pressures culminated in nationwide protests in January, which quickly took on a political character. Millions took to the streets across cities and even rural areas, in unprecedented demonstrations that the regime ultimately suppressed through violent crackdowns.  

 

Now, weeks into the current war, despite the Central Bank’s efforts to stabilize the currency, the issuance of one-million-toman banknotes has emerged as another sign of economic breakdown in a system largely controlled by the IRGC and other institutions tied to the leadership.  

The International Monetary Fund has portrayed Iran as among the economies experiencing a severe decline in 2025, with the real value of household incomes estimated to have fallen by 31% compared to the previous year amid very high inflation.  

Arezoo Karimi, an economic journalist, told The Media Line: “One month before the war began, official statistics showed inflation in Iran had reached its highest level since World War II.” She added that internet shutdowns have directly damaged online businesses and indirectly affected the broader economy.  

According to Karimi, the continuation of these conditions will further destabilize the war-stricken economy and drive up unemployment. She described Iran’s economy as a fragile mix of high inflation, stagnation in financial markets and economic activity, and growing instability—conditions now exacerbated by war.  

She noted that rising food prices have forced lower and middle-income households to remove certain items from their diets, with the economic crisis placing the greatest burden on these groups.  

Even if an agreement were reached between Iran’s ruling regime and the United States, she said, the short-term economic impact would likely be limited, as structural problems—such as low growth, excess liquidity, and persistent inflation—would remain unless sanctions are lifted and new fiscal and economic policies are implemented.  

Shortly before the January protests, the Iranian website Rouydad 24 reported that food inflation had exceeded 66%, and presented a bleak outlook. “What we see today in economic charts and data is the erosion of the middle class, widespread despair, depression, rising suicide rates, and the collapse of a nation’s hopes,” it wrote, adding that, according to most economists, “this is only the beginning, and a harsh winter lies ahead for Iran.”  

That forecast materialized weeks later, as the collapse of the national currency against the US dollar effectively crippled private businesses operating in a market dominated by state-linked entities, including networks tied to the IRGC. Scattered protests soon escalated into nationwide demonstrations. The situation has persisted, and the onset of war—now several weeks old—has effectively extended that “harsh winter” into a chaotic spring for the economy.  

Mahtab, a senior office worker in central Tehran, told The Media Line: “Prices are rising every day, and some food items have increased by 70 to 80% since the war began.” Earning around 40 million tomans per month, she said she struggles to cover even basic food and household expenses. During the Nowruz holidays, which typically involve visits with extended family, gatherings were limited to immediate relatives due to soaring costs. Living in constant fear of missiles, bombs, or drones striking her home, she said the worsening economic situation has pushed people to their limit and could reignite protests.  

The government has pledged to raise workers’ wages by up to 60%. While officials say oil production and exports continue, a further escalation of the war could deepen the budget deficit under wartime conditions at a time when the government is already under pressure to expand subsidies to prevent renewed unrest, which could pose a serious threat to its survival in the coming weeks.  

Mahtab described that during the war, prices have surged ahead of Nowruz, with food costs rising by about 70% to 80% compared to before the conflict. “Some items like cooking oil have actually doubled in price,” she said, adding, “Every time we go to the store, we’re shocked.” Many families had relied on stocked supplies such as pasta and canned tuna, but those reserves have now been depleted and are not sustainable for daily use. 

“Yesterday, I bought three loaves of bread, a few oranges, a tray of eggs, and one bottle of milk—it cost 700,000 tomans ($4.6). If I want to buy meat, chicken, rice, and oil tomorrow, I’d have to spend half my monthly salary.” Mahtab added, as the sound of air defenses could be heard in the background.  

She said Persian New Year visits were scaled back due to the war and warned that prices may not fall even if the fighting ends. “Even if the war ends tomorrow, there’s no guarantee prices will go back down.” The government’s efforts to inject dollars to keep the rate below 150,000 tomans have not lowered food costs.  

Daily life has been severely disrupted, with the internet down, markets and industries largely inactive, and widespread fear. “Every night we lie awake in fear, wondering when it will be our turn to be hit by a missile.  People have reached their breaking point.”