Iran’s Economy Contracts 6% as War Damage and Prior Inflation Drive Food-Price Spikes

-Israeli war that began more than three months ago, with the government estimating $270 billion in damage. 1 million more Iranians could fall below the international poverty line. Iranian government data showed cooking oil prices rose 430% from a year earlier, eggs 345%, rice 287%, and milk 139%.

U.S. naval blockade cut oil revenue. A Tehran resident told Radio Free Europe’s Radio Farda earlier this month that he sold furniture, appliances, and carpets to survive after losing his job and turning to selling sandwiches on the subway.

His phone and electricity bills increased fivefold. “We have all become poor,” the resident said. ” An Iranian government employee told the New York Times last week that his pay runs out by mid-month, forcing him to buy groceries on credit only to face doubled prices at settlement.

“Everybody is angry over the economy and if the government doesn’t fix things, there will be trouble,” he said. Iran-based economist Javad Rahimpour told Radio Farda that residents are draining savings and economic discontent is very high. He added that conditions for protests may not currently exist but that does not indicate convergence between the state and the people.

U.S. diplomat Dennis Ross wrote in a Washington Post op-ed last week that Iran’s leaders must address failures to provide for citizens without blaming the war. He said the regime will rebuild its military and defense base, diverting resources from a civilian economy already strained by water and electricity shortages.

“But even with aid, Tehran’s ability to manage its domestic woes will remain limited, and the internal pressures will build,” Ross wrote.