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Iran's inflation hits post-WWII high amid regional war and currency collapse
🇸🇦 Saudi Arabia /Economy & Trade

Iran's inflation hits post-WWII high amid regional war and currency collapse

From Asharq Al-Awsat · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Iran's year-on-year inflation reached 77.2% in May, its highest rate since World War II, with daily necessities seeing a 113.8% increase.
  • The rial has dramatically collapsed, falling from 32,000 to over 1.7 million against the US dollar since 2015, exacerbating economic hardship.
  • Analysts warn that continued economic pressure and inflation could lead to widespread social unrest, similar to protests seen earlier in the year.

Iran is experiencing its highest inflation rate since World War II, with year-on-year figures reaching 77.2% in May, according to a report from Iran's Central Bank. This official acknowledgment confirms the severe economic pain felt by ordinary Iranians, particularly concerning daily expenses. Inflation for items like medicine, taxi fares, and communication services surged by 113.8% compared to the previous year.

We will definitely have higher prices. We are fighting and we must accept this hardship.

— Masoud PezeshkianIranian President Masoud Pezeshkian warned citizens about upcoming price increases due to the ongoing conflict and economic hardships.

The dramatic collapse of the Iranian rial has significantly contributed to this crisis. The currency has plummeted from approximately 32,000 rials to the US dollar in 2015 to over 1.7 million rials per dollar today. President Masoud Pezeshkian has warned citizens of impending price increases, stating, "We will definitely have higher prices. We are fighting and we must accept this hardship."

an unprecedented rate since World War II.

— Bamdad Institute of Economic StudiesA private economic think tank described Iran's current inflation figures.

Economic analysts express grave concern over the current situation. A private think tank, the Bamdad Institute of Economic Studies, described the inflation rate as "unprecedented since World War II." The last time Iran saw comparable inflation was in 1942, during World War II, when invasions disrupted food supplies, leading to famine and disease. Experts like Saeed Leilaz warn that annual inflation could reach 80%, a level that Iranian society may not be able to tolerate.

I have no doubt that if Trump leaves (Iran without a formal peace deal) ... most probably, we will see something like January by the end of summer because of the economic and social situations.

— Mohsen JalilvandAnalyst Mohsen Jalilvand commented on the potential for social unrest due to the economic situation.

The combination of economic pressure, exacerbated by airstrikes damaging businesses and the oil industry, and U.S. sanctions targeting oil exports, has depressed tax revenues. Analysts like Mohsen Jalilvand suggest that if the economic and social conditions persist, Iran could face widespread protests by the end of summer, similar to the demonstrations earlier in the year where thousands were reportedly arrested.

Iran’s society cannot tolerate above 25% annual inflation.

— Saeed LeilazEconomist Saeed Leilaz warned about the societal impact of high inflation rates.
DistantNews Editorial

Originally published by Asharq Al-Awsat in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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