Despite a barrage of crises that could bring down a country — U.S. and Israeli airstrikes, the closure of the Strait of Hormuz, and murderous price surges — Iran's economy has not yet collapsed. Bloomberg said Iran's "survival economy," built up through years of war and international sanctions, is preventing an economic breakdown.
Even before the United States and Israel launched military operations against Iran, the Iranian economy was already in a severe crisis. It suffered from chronic high inflation and a shortage of foreign currency, and the rial plunged. Bloomberg reported that as prices for daily necessities such as eggs, rice, and potatoes soared, some Iranian households switched to cheap soy protein instead of beef and chicken.
The war made matters worse. U.S. and Israeli airstrikes destroyed dwellings, hospitals, and schools, as well as gas fields and steel plants. The Iranian government said the economic damage from airstrikes in recent weeks amounts to $270 billion (about 414 trillion won). That is close to this year's forecast for Iran's gross domestic product (GDP).
Corporations also took a direct hit. Thousands of business sites shut their doors, and many have yet to reopen. The International Monetary Fund (IMF) expects Iran's economy to contract 6.1% this year. It would be the steepest downturn in decades.
Joblessness is also severe. Bloomberg said at least 1 million jobs are expected to disappear after the war. The United Nations Development Programme (UNDP) projected that up to 4.1 million more people could fall into poverty.
On top of that, since April the United States has effectively blockaded Iranian ports, ratcheting up economic pressure. With exports of crude oil and petrochemicals — Iran's key revenue sources — blocked, rebuilding foreign currency reserves is getting harder.
Even so, Iran's economy is holding on. Bloomberg pointed to Iran's "survival know-how," accumulated while enduring decades of international sanctions. Iran has developed ways to export crude using front companies, covert trade networks, and a so‑called "dark fleet." The method allows it to sell oil and secure foreign currency while evading U.S. sanctions. Building up substantial foreign currency by boosting oil exports just before the war has also provided a buffer. Bloomberg added that higher global oil prices generated more revenue than expected, absorbing part of the economic shock.
The Iranian government has also shifted into emergency mode. It banned exports of food, agricultural products, and some steel products, and prioritized allocating foreign currency to imports of daily necessities. It is also securing new trade routes, such as sending goods by rail to Pakistan, Afghanistan, and China instead of through the Strait of Hormuz.
These measures align with the "Economy of Resistance" policy pursued since 2013. Led by former Supreme Leader Ayatollah Ali Khamenei, the strategy aims to prepare for Western pressure by lowering import dependence and strengthening domestic production.
Still, experts say the real test for Iran's economy will come after the war. Rebuilding destroyed infrastructure will require massive expense, and if international sanctions continue, the pace of recovery will inevitably be slow.