Iran's economy in 2026 is experiencing a chain reaction of collapse. Large-scale protests continue to spread across multiple cities, with citizens taking to the streets to shout for their unsustainable livelihoods. Official data is alarming: December inflation rate at 42.2%, essential goods like food soaring to 72%, and the World Bank's October statistics showing food inflation reaching 64.2%. This is not just simple price increases, but a systemic wealth evaporation.

What are ordinary families experiencing? Wage increases are far behind rising prices, forcing people to deplete years of savings to cover monthly living expenses. The desperate situation of being unable to afford food is no longer hypothetical but a real reality. The root cause points to a shocking number: before Trump withdrew from the Iran nuclear deal in 2018, the rial exchange rate was 50,000 to 1 USD; by the end of 2025, it had fallen to 1,420,000 to 1 USD—depreciating 28 times in just 8 years.

The free-fall decline in the exchange rate directly drives up import costs, but the domestically crippled industrial chain, hampered by sanctions, is unable to fill the supply gap, creating a deadly vicious cycle: supply shortages → soaring prices → continued currency devaluation → more expensive imports. The theories in economics textbooks have turned into a nightmare in reality.

Deeper issues lie in structural fragility—an over-reliance on oil exports as the single pillar of the economy. With international oil prices lingering below $60 for a long time, coupled with layered restrictions on export channels, fiscal revenue has already collapsed. Possessing resources but unable to monetize them is not only Iran’s dilemma but also a common vulnerability trap faced by many emerging economies.