Iran is grappling with a severe economic contraction as inflation soars and the labor market stagnates, according to a report from Iran International. Hojattollah Mirzaei, a former head of Iran's retirement funds, warned that between 3.5 million and 4.5 million Iranians are expected to fall into poverty this year alone.
Data from the Central Bank of Iran shows an annual inflation rate exceeding 50.6 percent as of April, with monthly inflation spiking to 67 percent. Prices for essential goods have surged by as much as 100 percent, far outpacing stagnant wage growth across the country.
Economist Masoud Nili cautioned that the nation is trapped in a dangerous cycle. "The greatest current danger to Iran’s economy is being caught in an escalating inflationary spiral,” Nili said, describing it as “a path that becomes increasingly difficult to control the further it goes.”
Market paralysis and naval tensions
Mirzaei projects that the Iranian economy will shrink by up to 10 percent this year, a figure he describes as potentially optimistic. The downturn has effectively frozen the labor market, with social researcher Kowsar Yousefi noting that an increasing number of employed Iranians are now living below the poverty line.
Tehran is currently pushing for the release of $24 billion in assets frozen in foreign banks to stabilize the currency and fund essential imports. However, economists warn that such measures offer only temporary relief and fail to address structural weaknesses. Iran currently ranks 125th out of 130 countries in global economic resilience, according to data from Factory Mutual Insurance Company.
Amid these domestic struggles, the Khatam al-Anbiya Central Headquarters warned on Saturday that all commercial ships and oil tankers must obtain permission from the IRGC Navy to pass through the Strait of Hormuz. The military command threatened to target any vessel that fails to adhere to designated routes or interferes with maritime traffic.
U.S. War Secretary Pete Hegseth reaffirmed in Singapore that the naval blockade against Iran remains in effect. Hegseth added that Washington is prepared to use military force if ongoing diplomatic efforts fail to prevent Iran from acquiring a nuclear weapon.
