Iranians struggle to afford groceries as the US squeezes their economy

The US- Israel war with Iran is transforming the spending habits of Iranians, whose purchasing power has evaporated under nearly-80% inflation and a currency that’s lost almost 30% of its value this year.

Decades of sanctions, corruption and poor management strangled the economy well before the war, but US-Israeli strikes have deepened the hardship. Almost six months since the start of the war, President Donald Trump is betting that intensifying economic pressure on the Islamic Republic will succeed.

Iran has managed to navigate economic isolation for years, but economists warn that the conflict may drag it into one of the worst economic crises in the history of the nation of 90 million people.

Across Iran’s capital, shop windows are covered in signs advertising interest-free credit and buy-now-pay-later plans. Popular for years for durable goods like furniture or kitchen appliances, their use has surged since the war as retailers extended the option to basic necessities, including food, according to state media reports.

Two months before US and Israeli strikes began, a slump in the rial triggered violent nationwide protests that evolved into a major challenge to the Islamic Republic’s leadership. Thousands were killed in the ensuing crackdown and the judiciary has continued to punish protesters, executing 27 people linked to the unrest since March, according to the United Nations’ top human rights official.

The International Monetary Fund said in April that it expected Iran’s economy to shrink 6.1% this year, the fastest pace since the mid-90s, with inflation at a record 70% — steep even for a country with one of the world’s highest rates. The Iranian government estimates the first six weeks of the war caused $270 billion worth of damage to the economy.

High profile hardline clerics like Ayatollah Ali Arafi, who stood as interim Supreme Leader after Ayatollah Ali Khamenei was killed by the U.S.-Israeli strikes that started the war, have explicitly told officials not to restart diplomacy.

“Do not continue the negotiations,” Arafi said last month, according to the semi-official Tasnim news agency. “Officials should not, on the pretext of economic problems and fear of the costs of war and striking infrastructure, continue the path of negotiations with infidels any further.”

Will these hardships force the Iranian theocratic government into any concessions? Unlikely, as this is the same government that killed possibly tens of thousands of its own citizens in January 2026.

In a war between Washington and Tehran, ordinary Iranian citizens are feeling the brunt of the pain.