The Economy of “continuous bleeding”: iranians pay the price of Ideological policies and regional wars

While the official media machine in Tehran is preoccupied with promoting military victories and geopolitical maneuvers, the deteriorating economic reality reveals another face of the conflict one defined by chronic poverty and structural unemployment that are steadily eroding Iranian society.

As the second quarter of 2026 begins, economic data and field reports indicate that the average citizen has effectively become the “involuntary financier” of the regime’s foreign policies, paying a heavy price from their daily sustenance and the future of their children.

Unemployment Figures: “Statistical Deception” and a Harsh Reality
Although reports issued by Iran’s Statistical Center in early 2026 attempt to paint an optimistic picture by placing the overall unemployment rate between 7.2% and 7.8%, economists describe these figures as “misleading.” The reason lies in the low labor force participation rate, which hovers around just 40%, meaning that millions of job seekers have become completely discouraged and dropped out of the “active labor force” records.

The crisis is even more evident among youth, where unemployment in the 15–24 age group is approaching 20%, while female unemployment is roughly double that of males, reaching up to 30% in some areas.

A striking paradox is that university graduates make up about 42% of the total unemployed, fueling the phenomenon of forced “brain drain” that is draining the country of its talent.

The situation grows even bleaker in certain regions, where unemployment rates exceed 12% or more, reflecting disparities in economic development and investment distribution. These regional gaps exacerbate internal migration from poorer areas to major cities, increasing pressure on infrastructure and public services and creating additional challenges.

Poverty in Iran has shifted from a marginal phenomenon to a reality consuming more than a third of the population. According to reports by the Parliamentary Research Center and the World Bank, approximately 38.8% of Iranians are expected to live below the poverty line by the end of 2026.

Independent sources go even further, suggesting that the rate in the capital, Tehran, has exceeded 50%, where the poverty line for a family of four is estimated at around 73 million tomans per month, while the minimum wage remains far below this level.

This vast disparity has led to the erosion of the middle class and the emergence of the “working poor” individuals with stable jobs whose incomes are insufficient to secure basic caloric needs.

This has resulted in rising malnutrition and a decline in overall consumption of essential food items such as meat and dairy.

Chronic inflation is one of the primary factors exacerbating poverty in Iran, often exceeding 30% to 40% annually.

This inflation erodes households’ purchasing power, particularly as wages fail to keep pace with rising prices.

The depreciation of the local currency has also increased the cost of imports, which in turn has driven up the prices of essential goods, especially food. Reports have indicated a decline in caloric intake among certain segments of the population an alarming indicator of deteriorating living standards.

Roots of the Crisis: external policies strangling the domestic economy

Analysts agree that the current crisis is not merely the result of coincidence or international sanctions, but rather the structural outcome of three main factors. Foremost among them is the financing of ideology and proxy groups, as the regime’s regional ambitions consume billions of dollars annually. Unlimited support for proxy groups such as Hezbollah, the Houthis, and militias in Iraq and Syria directly drains the public budget that should have been directed toward stimulating domestic production and creating jobs.

Another factor is mismanagement and structural corruption. The Iranian economy suffers from being a “rentier economy” dominated by unaccountable institutions, coupled with excessive money printing to cover deficits, leading to chronic inflation exceeding 40%.

The third factor is isolation from global markets. Confrontational foreign policies have led to intensified international sanctions, depriving the country of foreign investment and modern technology, and causing the Iranian rial to remain in a state of continuous decline against foreign currencies.

Social despair and a silent explosion

Teachers, retirees, and educated youth are now paying the price of the regime’s “war economy.” As resources shift toward the latest military escalation in the region, pressure on Iran’s domestic front has increased unprecedentedly.

The continued prioritization of military and ideological spending over national production and transparency means that the Iranian economy will remain trapped in a vicious cycle of inflation and stagnation, making any sustainable improvement impossible without a fundamental shift in the state’s highest priorities.