Iran Faces Severe Economic Pressure After U.S. and Israeli Strikes

Authorities are expected to approve a 40 percent increase in the price of cement which is needed for rebuilding war damage. Prosecutors in Tehran have said they will impose sentences of up to 20 years in prison and flogging on those convicted of price gouging or hoarding staple goods.

The government has raised wages distributed cash to the poor and issued coupons for items including rice chicken and cooking oil. These measures are adding further strain to government finances. Without new revenue authorities could face difficulty meeting payroll which would threaten the government's ability to maintain control according to an insider close to the establishment who spoke last month.

Another official said the country will face a disaster if sanctions are not lifted. The official noted that the largest industrial plants will require months or years to repair.

Iran's currency reached a record low of 1.8 million rial against the U.S. dollar on Wednesday. The rial had fallen 8 percent in the first month and a half of the war and lost 60 percent of its value in the months following a 12-day conflict with Israel last June.

State media estimated that reconstruction could cost around $270 billion. That sum equals nearly 80 percent of Iran's GDP of $341 billion. Hopes for a lasting peace agreement between the U.S. and Iran remain high but rebuilding efforts would take years.

The government may not be able to count on neighbors such as the United Arab Emirates to help facilitate oil trades or provide capital after the conflict ends. Some residents have responded to the grim outlook with increased spending on immediate consumption.

One woman visiting Turkey in late April described packed restaurants even as the broader economy stagnated saying many have stopped trying to save.