Impact of two months of war on Iranians

These days, more than at any other time, Iranian citizens stand puzzled in front of market shelves while buying their daily necessities. For every purchase, they must calculate the balance of their pockets: a kilogram of cooking oil, a carton of eggs, a bag of rice. Then, they must decide which one to buy and which one to return to the shelf.

In reality, this is the primary and visible scene in Iran on the 66th day of the war. From March 2025 to March 2026, the price of bread and grains has risen by 140 percent, meat and poultry by 135 percent, oils and fats by 219 percent, and dairy products and eggs by 116.8 percent. These official statistics from the Statistical Center of Iran cover the 12 months ending with the first month of the war, providing a floor for prices that have become significantly more expensive since then.

The economic arithmetic is becoming impossible for the average household. Food, medicine, automobiles, and electrical appliances have all seen weekly price hikes. The Iranian rial (toman) reached a historic low of 1.90 million per US dollar in the Tehran market—a staggering drop from approximately 800,000 just a year ago. The currency has lost more than half of its value within a single year.

In response, the government increased the monthly minimum wage by 60 percent for the new Solar year beginning March 21, 2026. However, the minimum wage remains less than 170 million rials (approximately $92), supplemented by food subsidies worth less than $10 per month.

War rarely comes as a single blow; it arrives as a series of cumulative pressures. When US and Israeli attacks on Iran began on February 28, the economy was already fragile. Based on World Bank reports, the national income per capita had dropped from approximately $8,000 in 2012 to $5,000 in 2024 due to a decade of sanctions, inflation, and corruption.

According to the United Nations Development Programme (UNDP), physical damage from thousands of airstrikes has led to widespread displacement and hit more than 23,000 factories and companies. Gholamhossein Mohammadi, Iran’s Deputy Minister of Labor and Social Affairs, states this has resulted in the loss of one million jobs directly, with another million unemployed indirectly. Unemployment insurance claims have nearly tripled compared to last year, with 147,000 applications in just two months.

Beyond physical destruction, Iranians face a crisis unprecedented in the digital age: a near-total internet blackout lasting 65 consecutive days. On February 28, internet traffic dropped by 98 percent. NetBlocks reports that Iran is the first country to have had full connectivity and then revert almost entirely to a local national network during a conflict.

The economic fallout of this "digital blackout" is severe:

- Online sales have dropped by 80 percent.
- The Tehran Stock Exchange lost 450,000 points in just four days.
- Daily losses stand at $35.7 million in direct terms, according to the Ministry of Communications, though analysts estimate real losses—including indirect hits to freelancers and small businesses—at $70 to $80 million per day.

For women, this has been an economic extinction event, as a generation of entrepreneurs who relied on digital platforms for teaching, consulting, and online trading saw their livelihoods extinguished overnight. Asal, a freelance designer in her thirties living in Tehran, described the experience to CNN: "No new projects, no replies. It is like everything just stopped overnight."

While state television attributes rising prices to psychological factors, the government has allowed its own employees to work from home with full pay. Saeed Tajik, a member of the Tehran Chamber of Commerce, identified the class dimension in an interview with the Iranian news site Fararu: "The government orders a 60 percent salary increase for its employees while allowing many of them to work remotely with full pay. Meanwhile, economic enterprises, unable to afford wages, are laying off their workers."

Iran's Central Bank, in an internal assessment delivered to President Masoud Pezeshkian, warned that rebuilding the war-damaged economy could take up to twelve years. According to Donya-e Eqtesad, an Iranian economic newspaper, even the most optimistic analysts, modelling a scenario in which a diplomatic agreement with Washington is reached, project that inflation will still average close to 50 percent for the remainder of 2026, five times the level that, in 2019, brought hundreds of thousands of Iranians into the streets.

Omar Ahmed is editor-in-chief of Rudaw’s Economy Desk.

The views expressed in this article are those of the author and do not necessarily reflect the position of Rudaw.