It cost Kian three and a half times more to fix his office air conditioning last week than it did two years ago, the last time he carried out repairs.
“It cost me 12 million tomans ($72) for the gas refuel and maintenance services,” the marketing worker from a city in central Iran told The National. “Two years ago, I paid just 3.5 million for that, with better AC gas.”
Air conditioning is almost a necessity in Iran, where summer temperatures can reach 50°C. But the hefty price rise is just one of the higher costs that Iran’s 90 million-strong population is facing. The war and policy changes have exacerbated years of high inflation as the government in Tehran struggles to cope with a prolonged economic crisis.
The only silver lining for Kian and his air conditioning is that he does not have to replace the whole unit.
Even the prices of cheaper brands have gone through the roof. Iranian price comparison site Emalls shows that an AC unit made by Chinese firm Hisense has gone up from 61 million tomans to 85 million tomans ($550) in the past three months. Higher quality brands are no longer available in Iran, Kian said.
Political uncertainty over the form and longevity of an agreement between Iran and the US to end the conflict is exacerbating Iranians’ fears about living long-term in a country where increasing costs have crushed many people's quality of life.
“A lot of people are worried because there’s no way the prices of goods, or everything else, go down, at least when there is no actual long-term [peace] deal,” said Kian. Many people were buying dollars, gold and property to try to preserve their wealth, he added. Like others, he spoke using a pseudonym for security reasons.
Overall, prices were 77 per cent higher at the end of May than at the same time last year, according to the latest statistics from Iran’s central bank.
Headline inflation figures hide much larger price increases on some items, including essentials such as food. While Iranians report no widespread shortages since the war began, fewer people have enough money to buy what is available.
resident of Tehran
Staples of Iranian cooking, including rice and eggs, have tripled in price over the past year, according to a World Food Programme price monitor.
Iranians confirmed those estimates based on prices they see in the shops. “I kid you not, meat is two million tomans ($13) a kilo now,” said Lilith, a resident of the capital, Tehran.
A one million toman-a-month government handout, can be used to buy basics such as flour, known as , known as kala barg. But the amount is so little – equivalent to around $6.50 – that it covers barely any individual needs. The quality of the goods is substandard, too, Lilith added.
“They are stuffing people with cheap white bread,” she told The National. Healthier wholegrain options are much more expensive. “When we go to the shops to use the kala barg system, it’s not enough for one month, and it’s the worst quality types of food. Things are a mess.”
Prices rise across the board
Essentials such as rent have increased by around 40 per cent, according to the Donya-e Eghtesad newspaper, despite a supposed 27 per cent cap on rises.
Iranians also report paying more to go online now than they did a year ago, in spite of enduring the longest government-imposed internet blackout in recorded history during the war.
“This time last year I was paying 500,000 tomans, now it’s 1.5 to two million,” said Bahman, a tech industry worker in Tehran, for a home and mobile internet package. That includes a VPN, without which he said the internet was “not worth it.” The government restored internet services in May, but Iranians still have to resort to VPNs to gain access to many foreign websites and platforms that are blocked in the country.
Traders such as clothing retailer and coffee shops, and service providers like beauty salons have tried to keep buyers coming through the doors by minimising price increases.
Millions of people were also laid off from their jobs during the war, forcing households who might otherwise have had money to spend to cut back.
“Even before the war, over the last year or two, business in various trades wasn't very good, and their customer numbers had dropped significantly,” said a businessman in Tehran. “That's because people had less cash to hand and were generally buying less. And over the years, we've seen many shopping centres with empty shops. To protect themselves, they haven't been able to increase their prices much.”
All the same, a small increase in Iran can still mean 40 or 50 per cent. “At the barber I go to, six months ago I was paying 400,000 tomans, but this year I'm paying 600,000 tomans ($4),” he added.
Why is inflation so high?
The price increases are in part because the government removed exchange rate subsidies for some imports at the beginning of the year. This means goods that are more expensive for importers to bring in to the country are now also more expensive for consumers. Sunflower oil, for example, has gone from around 58,000 tomans for 810g 12 months ago to 250,000 tomans ($1.60) last month, the WFP figures showed.
Prices may sound low against western or regional comparisons, but they are crippling for Iranians, who mostly live on low incomes. The minimum monthly income for a married worker with two children is around 26 million tomans ($167). The minimum wage is 16.6 million tomans, and various additional benefit allowances are added.
Damage from Israeli strikes to petrochemical and steel plants has added to the inflationary pressure.
“Food has run into another problem with its packaging,” a businessman from Tehran told The National. “Steel sheets were used for tinned goods, and polymers were used in many packaging materials. As these have become expensive, food prices have risen significantly.”
A US naval blockade of Iran’s southern ports imposed in April in response to failed talks to end the conflict, and Iran’s parallel blockade of the Strait of Hormuz, have disrupted imports, leading to enormous price increases on foreign goods.
Emalls shows huge increases in prices of consumer goods: a Microsoft Surface Book 2 laptop that cost 46 million tomans on March 18 has now rocketed to 84.5 million tomans.
An iPhone 16 that cost 81 million tomans last June now costs 232 million tomans on Digikala, an Amazon-style online retailer.
Cars have shot up in price too. A second-hand Peugeot 206 SD with around 230,000 miles on the clock that cost 465 million tomans last year has gone up to over a billion tomans.
Major postwar challenge
Government officials recognise that the economic hardships are major and that managing the population’s grievances will be a real test for the new leadership, including new supreme leader Mojtaba Khamenei.
Chief negotiator in talks with the US, Mohammad Bagher Ghalibaf said in a meeting with business chiefs on Wednesday that a major priority was “provision of a decent, prosperous life,” and “building the country.”
That comment suggested that he believes economic recovery, not more conflict, should be a priority to ensure regime survival, and managing the population’s grievances will be part of that.
“A system that has spent the last several months on war footing will now have to try governing after it,” Ali Vaez, Iran director at the Crisis Group conflict resolution organisation, said in a post on X. “That means significant economic challenges, facing continued discontent from below, and the internal political disputes overshadowed by war.”
Inflation and deteriorating living conditions in Iran have long been a driver of major protests. Demonstrations that began in late December over economic woes morphed into a countrywide anti-regime movement, spawning the largest popular challenge to the Islamic Republic in its modern history.
The regime put them down with brutal force, killing at least 7,000 people, according to human rights groups based outside Iran. Other tallies put the death toll many times higher.
At the moment, people are focused on survival, Lilith, the woman in Tehran, said. “People are so concerned about their daily living expenses, rent, just staying safe, and stuff like that,” she said.
Even the most optimistic forecasts suggest that the economic squeeze will not end any time soon for Iranians. A recent prediction published by Donya-e Eghtesad showed that even with a successful deal with the US, inflation will still hover at around 50 per cent by the end of September.
