Inflation Tops 80% as Iran's Economy Buckles Under Sanctions and Naval Blockade

Iran's economy is under mounting strain as an expanded campaign of US sanctions and a naval blockade cut into the country's ability to trade, with inflation now topping 80 percent and some food staples up as much as 100 percent from a year ago.

The Iranian currency has lost an additional 30 percent of its value so far this year, and the International Monetary Fund is projecting a 6.1 percent contraction in Iran's economy in 2026, which would mark the country's worst downturn in decades. More than a million jobs had already been lost by late May, according to figures cited in the reporting.

Treasury Secretary Scott Bessent has described the latest push as an economic D Day, targeting five specific sectors: digital assets, technology, gold, aviation and shipping. Separately, a naval blockade has choked off Iran's oil exports and blocked imports of refined fuel, producing the kind of fuel shortages and long gas station lines that have become a common sight in Tehran and other cities.

Esfandyar Batmanghelidj, chief executive of the Bourse and Bazaar Foundation, argued the sanctions are landing hardest on ordinary Iranians rather than the government. Digital assets and gold are how ordinary Iranians protect their savings, he said, adding that aviation keeps Iranian families connected with loved ones.

The economic pressure has begun to show up in smaller, scattered labor protests, a contrast to the large scale demonstrations seen in January. Recent unrest has included oil workers in Asaluyeh, roughly 100 laid off steel workers, petrochemical workers and teachers who say they have gone unpaid. Parliamentary speaker Mohammad Bagher Ghalibaf offered a blunt warning about the stakes, saying that if the people are hungry and there is no financial circulation, the country will not endure.