The Iranian economy is in free-fall, led by a stunning depreciation of its currency, the rial. Inflation and deepening poverty have fuelled the protests, which began with a strike among merchants in Tehran’s bazaar. US and UN sanctions continue to restrict access to foreign exchange and international banking, while central bank borrowing has fueled inflation. The World Bank has forecast that Iran’s GDP will shrink by 1.7 percent in 2025 and 2.8 percent in 2026. The Iranian economy is hobbled by extensive US and European sanctions, but also unaffordable subsidies, corruption and cumbersome regulation.

Source: Egypt Independent January 12, 2026 13:37 UTC