Trump’s Iran strategy depends on economic pain. The pain is mounting

Iran's economic crisis is deepening, with rising poverty, household debt, inflation, and unemployment, according to official reports. US President Donald Trump has indicated that economic pressure on Iran is part of the US strategy, stating that the country is "watching Iran with its huge inflation and the fact they have no money."

Workers in Iran are increasingly reliant on credit apps to make ends meet, with one 35-year-old Tehran resident using daily commuting credit apps and buying small meals on borrowed money. The Iranian Labour News Agency (ILNA) notes that workers are "constantly indebted to everyone and everything." The government has warned that reducing gasoline subsidies could exacerbate inflation and unemployment.

The International Monetary Fund projects a 6% contraction for the Iranian economy this year due to lost output and physical damage from the conflict. Even a US resolution to the conflict may take months to improve the economic outlook. Iran could potentially recover $20 billion in frozen assets, $8 billion from a US oil-sales license, and $5-10 billion from Strait of Hormuz fees, but these sources are not guaranteed.

As the conflict continues, millions of Iranians are forced to buy food and medicine on installment plans, with one 29-year-old part-time editor in Tehran using multiple micro-credit apps to cover expenses. Over 40% of their wages go towards rent, and another 40% to credit instalments. The growing use of credit apps among students facing uncertain employment prospects highlights the severity of the economic situation, with fines and fees piling up if payments are missed.