Iran's Economy Collapses Further Amidst Ongoing Conflict and Sanctions

Iran's economy, already fragile due to sanctions with inflation nearing 50 percent prior to the recent war, has deteriorated significantly following over five weeks of conflict. The immediate impact includes a sharp upward spiral in prices for essential goods like food, medicine, and diapers, as well as luxury items. The Iranian rial has plummeted, prompting the central bank to issue new high-denomination notes. Beyond inflation, the war has triggered widespread unemployment, business closures, and mass layoffs, particularly affecting construction workers and migrants. Critical infrastructure, including steel and petrochemical facilities, faces long-term damage from airstrikes, while communication blackouts have crippled e-commerce. Experts warn that the banking sector, already vulnerable with weak balance sheets, faces imminent collapse as loan repayments become impossible. These economic hardships are exacerbating social unrest and deepening the humanitarian crisis.