Iran’s economy after the March war: how bad can it get?

Iran’s economy is heading into a period of sharp deterioration following the March war, with mounting pressure from inflation, currency depreciation and damage to key industries raising the risk of a broader crisis.

Over the next two to four months, Iran’s economic conditions are expected to continue deteriorating sharply, with high inflation, rising unemployment, falling real incomes, and significant stress across key industries, the external sector, and the financial system, amounting to severe stagflation.

The economy entered the recent war from a weak starting point, and the combined effects of war-related damage, financial strain, and policy responses are likely to intensify these pressures.

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