But economists say the headline figure understates the severity of the crisis. The more revealing measure—point-to-point inflation—shows how sharply living costs have risen over the past year. Government statistics indicate that prices in March 2026 were 71.8 percent higher than a year earlier, a surge that has sharply eroded household purchasing power. In major cities such as Tehran, the increase is believed to be even higher, particularly for food.
The shock has unfolded as weeks of US and Israeli strikes have disrupted economic life across the country. In Tehran, where many residents have temporarily left the city, large parts of the capital’s commercial activity have slowed sharply. Many businesses remain closed and those who have stayed behind often limit their movements, wary of being caught in unpredictable air strikes.
Attacks on what the attackers describe as “regime infrastructure” have also begun to hit the industrial economy more directly. Recent strikes on major steel production facilities—among the country’s most important industrial employers—have disrupted supply chains and raised fears of wider job losses in manufacturing regions. For working-class and rural families, the situation is especially acute. Following the removal of preferential exchange rates (arz-e tarjihi), monthly food inflation has climbed above 100 percent, turning basic nutrition into the central economic struggle for many households. (Read More)
