Why has Iran’s economy not collapsed under US war pressure?

What the report says

Al Jazeera reported from Tehran on July 28 that Iran’s economy has not collapsed despite five months of war with the United States, prolonged sanctions and severe pressure on households. The report says Iran’s large population, resource base and decades of policy aimed at self-sufficiency have helped sustain domestic activity beyond oil, including agriculture, manufacturing and services, while informal labour, cross-border trade and opaque oil-transfer networks have kept parts of the economy moving.

Analysts cited by Al Jazeera said the system’s resilience has come at a heavy social cost. Welfare economist Hadi Kahalzadeh said he would define collapse as famine and the state being unable to pay workers or provide basic services, a threshold he does not believe Iran has reached. But he said shocks are being passed to households through inflation and currency depreciation, keeping goods available while making them harder to afford. The report cited inflation of about 90 percent, a monthly minimum wage below $100, and rising reliance on subsidies and electronic coupons.

The article also highlighted damage and disruption linked to the conflict. Government spokeswoman Fatemeh Mohajerani said recent US bombing hit bridges, tunnels and parts of gas and electricity capacity, while some banks remained affected after reported cyberattacks. A state-linked 2025 report projected the poverty rate had risen to 45 percent this year, up from just over 30 percent five years earlier.

Economist Mohammad Reza Farzanegan told Al Jazeera that corruption, weak institutions and geopolitical risk remain major obstacles. Officials also alleged billions in export and oil proceeds had not been returned. Analysts said Iran may continue to function, but without diplomacy and lower tensions, recovery is likely to remain limited.