Iran's economy has taken a severe hit during the months of war, with gross domestic product (GDP) shrinking by 10.1% in the first quarter of the Persian calendar year, compared with the same period a year earlier. The official data, released on Sunday, also includes the oil sector, one of the main pillars of the Iranian economy.
The sharp economic contraction coincided with a period when Iran was the focus of US and Israeli bombing. The war began on February 28 and involved about 40 days of attacks and counterattacks before a ceasefire was established in April. In mid-June, Tehran and Washington reached an agreement in principle, but hostilities later resumed, with both sides accusing each other of violating the terms.
One of the most critical issues for the Iranian economy remains the Strait of Hormuz, through which about 20% of the world's oil passed before the war. Any disruption to this strategic route could have direct consequences for Iranian exports and global oil supplies.
At the same time, the United States has reimposed a blockade on Iranian ports in the Persian Gulf, making it even more difficult to export crude oil.
During the previous blockade, from April to June, Iran failed to export oil, according to statements by the speaker of the Iranian parliament, Mohammad Bagher Ghalibaf.
Economic pressures have been compounded by high inflation and the continued depreciation of the rial. International sanctions have weighed on the Iranian economy for years, and the recent conflict has further worsened the situation.
In August, official inflation in Iran reached 69.9% year-on-year. Rising prices for basic goods, especially food, have hurt households' purchasing power.
Meanwhile, the rial has continued to lose value against the dollar. On the black market, one dollar was worth about 2.3 million rials on Sunday.
The International Monetary Fund predicts that the Iranian economy will shrink by 5.4% overall this year, as war, sanctions and problems with oil exports continue to weigh on the country's economic outlook.
