Tehran, Iran – Three weeks after Iran and the US signed a ceasefire memorandum, the truce remains fragile. Three tankers were hit in the Strait of Hormuz in the past two days, while mediated negotiations are expected to resume after Supreme Leader Khamenei's funeral.
The US military launched large airstrikes on southern Iranian provinces, prompting the IRGC and regular army to fire missiles and drones at US interests in Bahrain and Kuwait. Both sides accuse each other of violating the agreement.
Analysts say that even if a long-term resolution is reached and sanctions lifted, economic recovery will take time. The economy has been strained by years of mismanagement, corruption, stringent sanctions, and two wars in a year.
Falling purchasing power has pushed millions into poverty. Inflation has reached levels unseen since World War II: food inflation at nearly 134%, oils and fats up 278%, red meat and poultry over 178%, and bread and cereals nearly 139%.
Official unemployment stands at 7.5%, but labor participation is only 40%. Youth unemployment exceeds 20%. The minimum monthly wage is equivalent to just $95.
Central Bank data shows GDP growth was negative 0.7% last year, with gross fixed capital formation down nearly 12%. Imports fell 16.6%, exports by 5%.
Damage from 40 days of heavy bombardment, internet shutdowns, and a US naval blockade has exacerbated woes. The IMF projects Iran's real GDP will shrink by 6.1% in 2026.
Economist Mahdi Ghodsi notes that if military escalation halts and transport and internet links are restored, temporary layoffs could be reversed. However, damage to factories and equipment requires long-term investment.
Oil and gas facilities, ports, airports, and residential units were extensively damaged. US President Trump has threatened massive attacks on power grids and infrastructure if war resumes.
President Pezeshkian expressed fears of public unrest: "Our greatest strength is our unity. If people are dissatisfied and take to the streets, our power collapses." Hardliners reject any concessions.
Source: www.aljazeera.com