Economic pressure opens a new front for the authorities in Iran

Although Iran is seeking to demonstrate resilience in a war with the United States, its leaders fear that Donald Trump's threat of new economic measures could further worsen living conditions, reignite unrest and further erode the legitimacy of the Islamic Republic, Reuters writes.

The US president said on Friday that he would hit Iran hard economically, a day after Treasury Secretary Scott Besant announced that Washington could impose "unprecedented" measures on Tehran as early as next week. Washington did not specify what those measures would entail.

Despite confident rhetoric from Iran's leaders, after the country endured nearly six months of conflict and effectively closed the Strait of Hormuz, a key route for global oil supplies, authorities are facing growing pressure at home that could escalate into nationwide unrest, three Iranian officials told Reuters.

The officials, two political insiders, a former Iranian official and a dozen ordinary citizens spoke to Reuters on condition of anonymity, either for fear of reprisals or because they were not authorized to speak to the media.

Iran entered the war with high inflation, a weakening currency, energy shortages, sanctions, and deep structural weaknesses, and now faces damaged infrastructure, disrupted trade, declining production, and reconstruction costs.

Arshiya, a civil engineer, spent a decade working in Iran's construction industry before the war, which began with US and Israeli attacks on February 28, brought projects to a near-complete halt.

Now he is having a hard time finding work, as projects are being delayed or canceled, costs are rising, and the prospects for a quick recovery are slim.

"I'm worried. If Trump imposes more sanctions, how will ordinary people survive? I don't want my country to be punished either militarily or economically. We're already barely making ends meet," said the father of two from Isfahan, in central Iran.

Reuters says his case reflects a broader picture in Iran, where US strikes have damaged factories, power plants, transport networks and other key infrastructure, further straining an already weakened economy.

Mohsen (53) was forced to close his small import-export business with Gulf countries after Iran responded to the US attacks by targeting US bases and other targets in the region.

"I had to lay off 10 employees. It was painful, but I had no choice. I could no longer pay them wages, and now I rely on my savings to support my family," he said from the southern port city of Bandar Abbas.

Inflation and uncertainty are hitting households

Iran's annual inflation rate reached 66 percent in July, while consumer prices were 87,9 percent higher than a year earlier, according to Iran's Statistical Institute. Food prices rose by as much as 128 percent year-on-year.

For Iranian authorities, however, the greater threat may not be the economic crisis itself, but the danger that further deterioration in living conditions could spark mass unrest again, two political insiders and an official told Reuters.

The appointment of Hossein Taeb, one of the key organizers of earlier crackdowns on protesters, as the new commander of Iran's Basij militia last week is one of the clearest signs of the authorities' growing concern about a possible return of unrest, a former reformist official said.

The Basij is a volunteer paramilitary formation linked to the powerful Revolutionary Guard, and Iranian authorities have used both forces to suppress protests.

Economic discontent has repeatedly erupted into protests across Iran in recent years.

In January, the Revolutionary Guard and Basij suppressed nationwide protests over economic hardship, killing thousands.

In recent months, Iranian religious authorities have responded to fears of renewed unrest with executions, arrests, summons for questioning and long prison sentences for journalists, lawyers, activists, human rights defenders and students, according to human rights organizations.

Officials say the measures are necessary to maintain stability during the war. Critics, however, warn that they could further deepen the rift between the religious establishment and citizens hit by an increasingly difficult economic situation.

The salary disappears in a few days

Families are buying less meat and other staples, turning to cheaper alternatives, Reuters writes.

"I am ashamed of my children. My salary disappears in a few days. There is no meat or chicken on our table anymore. I don't know how we will make ends meet," said Hosein, a civil servant from the city of Yazd in central Iran.

Rents rose 31 percent in March from a year earlier, according to the Statistical Institute, while state media reported that real estate prices in Tehran were about 50 percent higher than last year.

Iran's minimum wage has been increased by about 60 percent this year, but the rial's continued weakness has eroded purchasing power. The dollar value of the minimum wage has fallen from about $105 to $86 since the end of March.

Bijan, 40, was earning about $1.000 a month when he started working as an engineer 15 years ago. He has since started teaching online classes to make ends meet. Today, he and his wife barely make about $400 a month together and have moved from Tehran to a cheaper province.

"I used to work maybe five or six hours a day... Now I'm either working, looking for a job, or afraid I won't have enough," said Bidžan.

For many Iranians, the fear of a renewed conflict makes planning for the future even more difficult.

US naval blockade increases costs

Iran is trying to secure the supply of essential products through alternative routes, including land corridors and the Caspian Sea, but these routes are also under increasing pressure.

Attacks on bridges have disrupted land transportation, increasing the cost and time it takes for goods to reach Iran.

President Masoud Pezeshkian acknowledged the extent of the pressure last week, saying: “Our problems have multiplied, while our incomes have fallen at the same time.”

Goods that previously arrived by ship now take longer routes to Iran, which raises prices, Pezeshkian said. He added that Iran is selling less oil and collecting less tax revenue from damaged or struggling businesses.

The blockade has also virtually halted gasoline imports into Iran, MP Reza Sepahvand told the ILNA news agency. He added that daily gasoline production has peaked at around 130 million liters, while consumption is around 137 million liters.