Food prices soar as war, sanctions and blockade batter economy in Iran

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Iran is currently grappling with severe economic instability driven by war, international sanctions, and a naval blockade that has severely strained the daily lives of ordinary citizens. Inflation has reached alarming levels, with annual rates hitting 66% in July alone, while food prices surged by 128% over the year. This hyperinflation has rendered previous salaries insufficient to sustain families for even a few days, forcing many households to eliminate basic necessities like meat and chicken from their diets. The damage to infrastructure and the disruption of trade routes have compounded these issues, leaving the average Iranian struggling to meet fundamental needs as the cost of living continues to skyrocket. While the general population bears the brunt of this economic collapse, the regime has historically found ways to circumvent sanctions and maintain its financial stability through parallel banking systems and illicit activities. However, recent developments suggest a potential shift in this dynamic, particularly following the United Arab Emirates' decision to suspend all economic and financial bonds with Iran. For years, the UAE served as a critical lifeline for the Iranian leadership and its Revolutionary Guard Corps (IRGC), providing a haven where officials could launder money and operate without consequence. The suspension of these ties threatens to cut off a vital funding source, potentially undermining the regime's ability to pay its security forces and maintain control, thereby increasing the risk that economic hardship will reignite mass unrest. Amidst this growing desperation, anger among ordinary Iranians is increasingly directed not only at the domestic leadership but also at external powers like the United States for imposing the naval blockade and restricting access to the Strait of Hormuz. Despite this external pressure, many protesters express a willingness to endure suffering as long as they believe it will lead to an end to the current regime. The situation has become so precarious that the primary concern for the leadership is no longer just the economic pain itself, but the fear that worsening conditions will push the population back onto the streets in unprecedented numbers. This potential resurgence of widespread protest represents a far greater threat to the regime's grip on power than the economic metrics alone would suggest. In response to the humanitarian crisis and the risk of aid being siphoned off by state actors, a new initiative is emerging to provide direct support to families in Iran without involving the IRGC. This project, developed through a joint venture between Iranian and Israeli entities, aims to create a regulated, OFAC-approved platform that allows the diaspora to send financial assistance directly to those in need. The goal is to alleviate poverty systematically while ensuring that the funds do not enrich the regime or its military wings. By bypassing traditional channels controlled by the IRGC, this humanitarian effort seeks to empower individuals and families without inadvertently strengthening the very structures causing their oppression, offering a glimmer of hope amidst a landscape defined by scarcity and political tension.

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Inside Iran, the regime is facing growing pressure from a war battered economy and the risk of renewed unrest. According to Iran's statistical center, annual inflation reached 66% in July, while food prices rose 128% yearonear as damaged infrastructure, disrupted trade, and the US naval blockade deepened the strain on ordinary Iranians. President Trump is now threatening new, never-beforeseen economic measures, but it's not clear exactly what those are yet. Still, for Tehran's leadership, the greater threat may not be the economic pain itself, but the risk that worsening hardship reignites mass unrest and brings protesters back to the streets. To discuss more, we're joined in studio now by Pente Modi, an Iranian journalist and documentary filmmaker. Pente, thank you for being with us here in the i24 News studio. >> It's an honor to be here, Nicole. Thank you. >> Can you take us inside Iran as best you can with food inflation at 128%. What does this economic pressure actually look like in daily life for ordinary Iranians? It means that a salary that was enough to feed a family for a month is now disappearing within days. It means that many people have to choose uh what necessity and what basic food they can afford. It means that a lot of families have uh now vanished u meats, chicken uh and red meat from uh their table. Um and a lot of uh people are currently indeed suffering economically. Those who consider themselves being a middle class are finding themselves now with um a salary that is finishing in a few days and they can't afford even uh red meat or chicken. Well, this is certainly hitting the ordinary Iranians most, but Pontea, what will be the signs that it actually hits the regime? What should we be looking for to so see that the regime is unable to pay the IRGC forces, the besiege forces, that it's actually making an impact rather than just hitting the ordinary Iranians? Nicole, very good question. Actually there was um I was reading the newspapers and I saw that a lot of them are saying oh Iranian Iran's economy is still holding up and then um the first question that comes to you as in Iranian is whose economic is are you talking about exactly the regime's economy? Yes. because they have found a lot of ways through the years how to circumvent through the um sanctions, how to build parallel um ways to still enrich themselves and how to abuse um how to abuse actually other sectors to gain the money that they need for their endeavors. But people that is another question with their economy. Today was a good news actually that um United Arab Emirates had suspended um all economic uh uh and financial um bonds with Iran. And that is an important important actually developments because United Arab Emirates have been for years the economic lifeline of uh the Iranian regime and now um this will make actually a lot of difference. But it still comes back to the same question because we've seen the Iranian economy in shambles for years. We've seen how it impacts the ordinary Iranians. But you just said that the regime has found ways to circumvent this pressure and still stay intact. So what should we be looking for to see that it is actually making a difference on the regime's grip inside Iran? Mhm. Um I think that honestly when the uh military knows where for example and how Kame in uh is where he is about his whereabouts I'm sure they know what economic line is keeping this regime alive and they should cut that this important development with the United Arab Emirates was definitely an important one because for years we have been hearing that a lot of uh IRGC people are just are it's their haven. They go there, they withwash their money, they they do everything and they just nothing is actually touching them economically. And now this or this is we're going to see this um also with the hormones uh um closure um well people are at the moment indeed suffering from that but >> there are many ways that I'm sure countries such as United States if they want they can find all those ways how to how they can cut uh the legs of >> where's the anger right now among ordinary Iranians because you mentioned the naval blockade the straight of Hormuz that's coming from the United States is some of this anger towards the economic hardships spilling over towards Washington because they're the ones putting this pressure that's trickling down into the the people. Um well of course in every society you have different people but there are people who are against the war for exactly these reasons but at the same time they they have enormous anger against the regime. Um but protesters many protesters their anger is so high that um they say okay we are prepared to go through this suffering as long as we know for sure that >> an end to them is coming. >> Yeah that's certainly the main question that we're all looking for. Pente join us often on i24 news but you're from abroad. You're here in Israel right now and I just wanted to ask you about the project that you're working on while you're here. Yes. Well, uh, thank you so much. Um, I'm here for a joint project between Iranian and Israelis. It's the first joint venture between them since 1979. And um what we want is actually to make sure that p poverty in this kind of situations that we are dealing now doesn't become another um systematic uh tool for the regime to abuse this poverty poverty against the people because as as you know people um let me let me say it like this is about helping people without um without making the regime powerful. Um it is an humanitarian uh platform. Um and it is a system, it is an infrastructure to uh make sure that people are getting the humanitarian aid without the IRGC getting a portion of it. Uh a lot of people are helping their families in Iran. But always the tr it goes through the channels that IRGC is enriching himself >> with that portion of the money. Um this is a regulated platform OFAC approved and the aim is to help families and take them from the poverty because the Iranian diaspora has has enough money to help people in Iran and at the same time IRGC doesn't get anything. >> A very important initiative. Pentam Modiri, thank you for being with us in the i24 news studio and sharing more. Appreciate it. >> Thank you Nicole.