Iranian households feel severe strain as war-driven inflation spikes

Iranian families are curbing spending on food, housing and education as the eight-month-old war with the United States drives one of the country’s sharpest inflation surges in decades. Consumer prices in September were almost 90% higher than a year earlier, with food and beverage costs up 121.8%, according to official data released by state media.

The conflict, which began after U.S. and Israeli strikes on Iran on Feb. 28 and was followed by Tehran’s closure of the Strait of Hormuz and a U.S. blockade of Iranian ports, has disrupted oil exports, trade and government revenues, compounding the effects of long-standing sanctions and economic mismanagement.

Workers report that wages no longer cover basic expenses. A government employee in Isfahan said his salary of less than $100 allows survival for only about ten days, while a shopkeeper in Mashhad expressed that his family lacks money and future prospects. Official estimates place the minimum monthly cost of living for a three-person working-class family at roughly $336, more than three times the average monthly wage of about $92 at the free-market exchange rate.

Housing costs have also risen sharply, with September rents 32.8% higher than a year earlier and utilities and fuel up nearly 38%. The official unemployment rate climbed to 9.1% in the spring, and the labour-force participation rate fell to 40.7%, indicating fewer working-age Iranians are employed or seeking work. Young people face particularly high joblessness, with nearly a quarter of those aged 15-24 unemployed.

The weakening rial, which has lost more than half its value over the past year, is limiting opportunities for overseas education. A student studying in Turkey reported being unable to pay tuition for the current year and returning home.

Iran’s Economy Minister Ali Madanizadeh apologized for the mounting cost-of-living pressures, noting that pensioners, workers and civil servants bear the brunt of soaring prices. Central Bank Governor Abdolnasser Hemmati later described U.S. claims that Iran’s economy is collapsing as “an illusion.”

Analysts say expanded U.S. sanctions announced in August as part of “Operation Economic Outcast” are adding to the strain by raising import costs and limiting access to foreign currency and raw materials. The combined impact of war, inflation and rising unemployment presents a growing political challenge for Iranian authorities, who remain wary of renewed public unrest.