Iran’s economy in crisis as US launches new sanctions campaign
Guardian AU Business
•Mon, 31 Aug 2026 13:00:26 GMT
📰 What Happened
Iran is in the grip of an economic crisis as the US launches a new sanctions campaign called Operation Economic Outcast: food inflation is runaway - vegetable oil up 383% year-on-year, eggs 294%, chicken 177%, red meat 148% - petrol stations are closing and the rial hit roughly 2m to the US dollar on the open market on August 23. Iran's statistics centre put year-on-year inflation at 84.4% in August.
🔍 The Backstory
Long before the new sanctions push, Iran's economy had become a parallel battlefield, with lack of foreign exchange reserves, sanctions and mismanagement decimating purchasing power. The government is trying to prevent economic conditions from spiralling into social unrest.
🎯 Why It Matters
The combination of runaway inflation, currency collapse and new sanctions threatens to push many Iranians deeper into poverty, with risks of social unrest and regional spillover. It also raises the stakes for any diplomacy between Washington and Tehran.
Iran is in the grip of an economic crisis as the US launches a new sanctions campaign called Operation Economic Outcast: food inflation is runaway - vegetable oil up 383% year-on-year, eggs 294%, chicken 177%, red meat 148% - petrol stations are closing and the rial hit roughly 2m to the US dollar on the open market on August 23. Iran's statistics centre put year-on-year inflation at 84.4% in August.
Long before the new sanctions push, Iran's economy had become a parallel battlefield, with lack of foreign exchange reserves, sanctions and mismanagement decimating purchasing power. The government is trying to prevent economic conditions from spiralling into social unrest.
The combination of runaway inflation, currency collapse and new sanctions threatens to push many Iranians deeper into poverty, with risks of social unrest and regional spillover. It also raises the stakes for any diplomacy between Washington and Tehran.