Iran’s leaders acknowledge economic toll of war, pledge diplomacy, defence

What the report says

Iran’s top officials have publicly acknowledged that six months of war with the United States is weighing heavily on the country’s economy, even as they insist Tehran will keep combining diplomacy with military readiness. In remarks reported by Al Jazeera on Saturday, President Masoud Pezeshkian said sanctions and a US naval blockade had caused exports and imports to fall by nearly 35 percent, adding that the government is now focused on inflation, jobs and reducing reliance on the dollar.

Al Jazeera reported that the leadership’s comments came amid broader pressure on daily life in Iran. The article said annual inflation reached 66 percent last month, and quoted Tehran residents describing rising prices, weaker trade and hardship for households and businesses. It also said the state attributed some of the strain to blocked ports and reduced access to foreign trade, though it noted that Iran had still managed to sell oil during a brief June memorandum of understanding with Washington.

Supreme Leader Ayatollah Mojtaba Khamenei, in a written statement cited by Al Jazeera, urged the government to address inflation, unemployment and price management. The government described diplomacy and defence as inseparable priorities, while also signalling it would maintain control over the Strait of Hormuz. Iranian military officials struck a defiant tone, and Qatar’s prime minister reportedly held talks in Tehran on reopening shipping through the strait. The developments matter because they show Tehran trying to balance domestic economic stability, regional diplomacy and deterrence under wartime pressure.