Prices soar, jobs vanish as war strangles Iran's economy

Tehran, Iran – Prices are soaring in Iran and millions of jobs have been lost or frozen as the war with the US and Israel inflicts escalating economic damage.

Food, medicine, cars, electronics, and petrochemicals are among the many items Iranians are paying far more for this Saturday, the first day of the working week, than they did a week earlier.

A toxic mix of poor domestic management, strikes on Iranian infrastructure, US sanctions and a naval blockade, coupled with Tehran's near-total internet shutdown now in its 64th day, is strangling the economy of the nation of more than 90 million.

The rial, the national currency, has sunk to a new all-time low of 1.84 million rials to the US dollar on the free market in Tehran. Foreign exchange transactions are scarce amid market turmoil.

A similar scene is playing out in other markets, where sellers and buyers are unsure what to do about the uncertainty over how much worse things could get, and whether new goods will arrive.

Amid dwindling or stalled supply, some sellers have jacked up prices at a pace rarely seen in more than a decade of facing one of the world's highest inflation rates.

An iPhone 17 Pro Max 256GB, listed by Apple at $1,200 in the US, is being offered by some stores in the capital for nearly 5 billion rials ($2,750). Other shops simply refuse to sell.

A Peugeot 206, a budget French hatchback now built and popular in Iran, costs up to 30 billion rials ($16,500). Imported cars are even harder to find, and are listed at exorbitant prices, sometimes more than five times their cost in nearby markets such as the United Arab Emirates.

State television confirmed car prices are 'rising daily' in a report on Friday, but blamed psychological factors tied to inflation and 'phantom prices' floated by greedy sellers seeking to cash in on the chaos.

Iran's monthly minimum wage now stands at less than 170 million rials ($92), even after the government raised it by about 60% for the current Persian calendar year starting March 21. The government also subsidizes food and essentials worth less than $10 per month per person.

'You look at prices and wages, and you see the numbers don't match,' said a Tehran resident who asked not to be named. 'You can't do much except turn what you have into something that doesn't lose value, or buy what you need now because later you may not afford it.'

The government of President Masoud Pezeshkian has not provided details on how many people have lost income. But from tech firms in Tehran to massive steelmakers in Isfahan, most major companies across the country have been forced to lay off staff.

A statement attributed to Supreme Leader Mojtaba Khamenei on Friday said the Islamic Republic had 'proved to the world part of its superior capability in a military confrontation'. Now, he said, the religious and military leadership must 'thwart and defeat the enemy' in an economic and cultural struggle. Khamenei, who has not been seen or heard in person since becoming supreme leader after Ayatollah Ali Khamenei was killed on the war's first day, said businesses must avoid laying off workers as much as possible and added that Iran is 'reaching peaks of progress and development'.