Iran's economy spirals deeper into crisis following US and Israeli military campaign
A fragile two-week ceasefire between Iran, the US and Israel, announced on 7-8 April 2026, has brought only limited relief to Tehran’s battered economy. Decades of sanctions, compounded by direct strikes on infrastructure during the five-to-six-week conflict that began in late February, have accelerated a collapse already underway. Analysts project a GDP contraction of around 10% or more this year, far worse than pre-war forecasts of modest shrinkage.7410c6 Iran’s economy was already fragile before the latest escalation. Chronic US sanctions had stifled oil revenues, driven the rial to record lows (trading at roughly 1.3–1.6 million to the US dollar in early 2026), and pushed inflation above 40%. Protests over living costs and energy shortages erupted in late 2025 and early 2026. The war dramatically worsened the picture through physical destruction, disrupted trade, and heightened uncertainty. Key blows to Iran’s economy Infrastructure damage: US and Israeli strikes targeted pow...