The war that the United States and Israel waged against Iran has inflicted direct damage on the country of between 270 and 500 billion dollars (according to estimates from various sources), and indirectly, through the blow to basic industries and infrastructure and the imposition of unemployment on several million people, it will probably cause the country losses exceeding one trillion dollars.
The earthquake this war has set off on the floor of the stormy sea of Iran's economy is generating an "economic tsunami" whose waves will be far higher and more devastating than the country's rulers imagine and expect.
Iran's economic tsunami is made up of a combination of six crises:
First, the production crisis
Factories have either been damaged or face shortages of energy, parts, capital and markets. The production crisis has also engulfed agriculture and livestock farming.
Second, the inflation crisis
For years, Iran's economy has suffered from chronic inflation. But this war, on the one hand, by reducing oil and non-oil exports, has cut the supply of dollars, driven up precautionary demand for dollars and caused a drop in imports; on the other hand, by reducing gross domestic product, especially in the production sector, it has reduced the supply of goods. In addition, with the government's revenues falling and its expenditures rising because of the war, the budget deficit and borrowing have increased. Together, these factors have pushed the inflation rate to figures approaching three digits and have brought the country to the brink of hyperinflation and an avalanche-like collapse of the national currency. The heavy pressure of this inflation, in the form of daily price increases, has come crashing down on people, especially the poor.
Third, the crisis of recession and unemployment
According to the International Monetary Fund's estimate, Iran will experience negative growth of 6 percent in 2026.1 Recession has shown its face in industry, services, tourism, the bazaar and small shopkeepers, start-ups and dozens of other sectors of the economy, and all economic sectors have been forced to start cutting their workforce. If we add the internet shutdown to this situation, the picture becomes far more painful. The internet shutdown has directly shut down the businesses of several million people and has disrupted marketing, sales, orders and the flow of work in almost every sector of the economy. Even small businesses such as house painting or restaurants and dozens of other trades have been hurt.
Fourth, the livelihood crisis
The wave of inflation and rising prices for food, medicine, rent and transportation puts the main pressure on low-income households. At present, the seven lowest income deciles of the country, that is, close to 20 million households, are under pressure, and this pressure will increase sharply. Alongside the day-by-day price rises, the wave of unemployment that has begun will make the situation of these households even more dire.
Fifth, the crisis of management and corruption
For a long time now, because of the spread of corrupt gangs of plunder and power, the structure of the regime has turned into a kleptocracy. For the previous Leader, politics consisted of striking a balance between the sometimes conflicting interests of these gangs and their differing political tendencies. With his removal, the next Leader, even if he wanted to, cannot play that role, and conflict and purges inevitably lie ahead for this structure. This reality is for now concealed by the danger and atmosphere of war, although the divisions are showing themselves even now. But once the danger of war has passed, these conflicts and purges, even bloody ones, will manifest themselves with full force. This situation will make the disarray and incompetence of management in running the country several times worse.
Sixth, the crisis of trust
When people see the future as insecure, investment, purchasing, production and entrepreneurship come to a halt. The natural flow of the economic chain and the interaction among its various sectors has been broken or is in the process of breaking apart. The situation of "neither war nor peace" has intensified this crisis.
Soon Iran will face a deep stagflation, a recession that will go far beyond the IMF's forecast rate of -6% for Iran in 2026. At the same time, inflation above 100% will not merely push prices up; it may turn into hyperinflation in which the currency loses value daily and we witness inflation rates of several thousand percent. At least the seven lowest income deciles will be turned into poor and destitute masses. In fact, an "economic tsunami" is coming whose waves will be far higher and more devastating than the country's rulers imagine and expect, and its main victims will be millions of people who will be pushed over the precipice of poverty, hunger, insecurity and even death. This precipice increases the likelihood of major social unrest, which in turn will throw the economic situation into even greater turmoil. The rulers' belief that intimidating and repressing the people will be effective in confronting the economic tsunami is a mistaken one. The regime's own forces of repression will also drown in these waves, and the likelihood of chaos and disintegration will grow greatly.
The government alone does not have the resources or the capacity to confront this tsunami. The only remedy is to put to use the regime's economic resources that lie outside the government: resources held by the institutions and foundations under the supervision of the Leader, the IRGC and other quasi-governmental sectors. Although we do not have precise figures, estimates indicate that the value of these resources exceeds 200 billion dollars. Institutions such as the Execution of Imam Khomeini's Order (EIKO), the Mostazafan Foundation, the Khatam al-Anbiya Construction Headquarters and dozens of other foundations and institutions must be nationalized, and with their revenues and by transferring their ownership to the people in the form of monthly tokens, a monthly allowance equivalent to 300 dollars should be provided to at least the 20 million households in the seven lowest income deciles. Mechanisms for implementing such a plan exist in the experience of other countries as well. In addition to various experiences around the world, experts in Iran have at different times proposed plans that were never given consideration. Iranian economists and financial specialists, drawing on international experience, have designed very good solutions for implementing this proposal.
The aim of this piece is not to go into the implementation details of this proposal, but rather to warn of a devastating danger threatening the people and the country of Iran and to point toward a path to a solution.
The essence of what I am saying is that the people's wealth, which over decades has been accumulated in certain centers without any legal basis or economic justification, must be returned to the people in several stages. This return to the people must:
- First, distribute ownership rights equally among the people (in the form of tokens).
- Second, place this wealth, within the framework of a new institution such as a "National Relief Center," under government management, and resolve the problems that prevent it from bearing fruit.
- Third, convert the distributed token-based ownership rights into shares through the stock market.
- Fourth, transfer the profits or income to the people monthly in a reliable foreign currency.
Mohsen Sazegara
Khordad 1405 (May–June 2026)
Footnote:
1-International Monetary Fund (IMF), World Economic Outlook Database, April 2026, Iran – Real GDP Growth, available at: https://www.imf.org/en/countries/irn (accessed May