With the West Asia conflict still ongoing, concerns are growing over the economic condition of Iran. The country, which was already facing internal unrest since December 2025, is now dealing with mounting
financial losses as the war deepens its crisis.
One hundred days after the deadly protests of January 8 and 9, the situation has worsened sharply. Iran’s fragile economy has taken a severe hit, and millions are feared to be without jobs as the conflict accelerates economic decline.
The unrest began in late December at the Grand Bazaar of Tehran and quickly spread across the country. What followed in January has been described as the deadliest crackdown on protesters in Iran’s recent history.
Soon after, a war involving the United States and Israel began on February 28, adding to the country’s economic troubles and placing further strain on already weak systems.
Iran’s services sector suffers heavy losses
The impact was first seen in the services sector during the protests. Advertising agencies, consulting firms, digital businesses, and tourism-related services were hit hard. The war has since made the situation worse, causing long-term damage to many of these industries. In multiple cases, businesses have not been able to recover.
Internet disruptions hit digital economy
Internet shutdowns have played a major role in the downturn. There were three weeks of disruptions during the protests, followed by more than 1,100 hours of outages since the war began on February 28.
According to Dadban, more than 10 million people in Iran depend on the internet for their income. These disruptions have effectively paralysed large parts of the digital economy.
As a result, many have seen a sharp fall in earnings, while others have lost their jobs entirely.
Key industries damaged
The conflict has also caused serious damage to important economic sectors. Petrochemical plants and steel production units in several cities have been affected.
These industries are central to Iran’s economy, and their disruption has led to shortages of raw materials. This has created a chain reaction, affecting manufacturing and other related sectors.
Layoffs have become widespread, impacting not just factory workers but also those employed in connected businesses.
Falling exports and rising losses
Exports have dropped significantly, limiting the country’s already restricted foreign income. The scale of damage is reflected in official estimates.
A government spokesperson, quoted by Iran International, said total war losses stand at around $270 billion. This is about 57 per cent of Iran’s gross domestic product and several times higher than its yearly oil revenues.
The figure is nearly three times the government’s general budget, showing the level of financial pressure on the state.
Stagflation takes hold
Iran’s economy is now facing stagflation, a combination of high inflation, slow growth and rising unemployment.
Even if the war ends soon, experts believe recovery will take time and may not be even across sectors. These conditions have increased the risk of fresh protests. Analysts say that without a political agreement, especially with the United States, unrest could return and may be larger than before.
Public anger grows
Meanwhile, frustration among people is rising, especially on social media. Many have shared their struggles as jobs disappear and incomes fall.
One person, quoted by Iran International, in Tehran said they had been working reduced hours since January before losing their job in March. Another described how freelance work has almost disappeared, leaving many without any income.
A third user spoke of rising prices and worsening conditions, saying people are waiting for a moment to protest again.
Inflation reaches record levels
Inflation has surged over the past 100 days. It was already above 50 per cent in December and rose to over 70 per cent by late February, even before the war began.
In essential items such as food, prices have risen by more than 110 per cent. Medicines, including insulin, have become much more expensive and are sometimes unavailable. Experts believe inflation may now have crossed into triple digits, although updated figures have not yet been released.
Some say the lack of major shortages is due to falling demand rather than stable supply. With incomes dropping, many families cannot afford basic goods.
Households are using savings, loans or rental deposits to manage expenses. In some cases, people are selling personal belongings just to buy food.
Business owners are also struggling. Many are selling equipment, with online platforms showing a rise in listings for café items and electronics, often with few buyers.
With all these, the government is facing growing financial pressure. Even before the war, it struggled to meet its budget needs. Now, with unemployment rising, it does not have the resources to provide proper support. Some workers have said they are unable to access unemployment benefits at all.
The combined impact of war, economic decline and social unrest continues to shape a difficult situation for the country.
