The Economy of Survival
Iran 2026, from testimony to strategic reading
Executive summary
This report draws on two converging materials. The first is a corpus of testimonies addressed to DORNA in the spring of 2026 by Iranian citizens, drawn from workers, civil servants, self-employed, mothers of families, and young graduates, in response to a simple public request: describe the state of their household economy. The second is a body of macroeconomic and structural data covering inflation, currency, wages, the labour market, the social protection system, the cumulative impact of the wars of 2025 and 2026, and the para-state capture of the Iranian economy.
The diagnosis is captured in three lines. The Islamic Republic has, in the technical sense of the term, entered a hyperinflationary regime, with monetary depreciation that places the rial at 1.75 million per dollar as of 4 June 20265 and food inflation that official bodies themselves report between 99 % and 110 % year-on-year2. The minimum wage, revalued by 60 % in March 2026, is now worth $95 a month6, less than half its real value eighteen months ago and roughly one-third of the poverty line recognised by the Majlis Research Centre for a four-person household in Tehran8. The urban middle classes, still identifiable five years ago, have become what the newspaper Shargh aptly terms a "poor middle class".
This collapse is not cyclical. It is the visible effect of an economic system organised to transfer wealth toward a political-security oligarchy: the complex formed by the Islamic Revolutionary Guard Corps, the religious foundations (bonyads), the Setad placed under the authority of the Supreme Leader, and the subcontracting architecture that depends on it. The share of oil and gas rents allocated to the IRGC and the security forces in the 1404 draft budget reached 51 %18. The assets under effective control of the Beit-e Rahbari, consolidated across Setad, Astan Quds Razavi and Bonyad Mostazafan, are today estimated at around $200 billion19. Inflation, the collapse of the rial and the war are the symptoms; the para-state capture and the political lock-in are the disease.
I. Framework and method
A request addressed to society
In the spring of 2026, as Iran was barely emerging from a major war and parts of the electricity and air networks were operating at reduced capacity, DORNA relayed through the personal accounts of several of its members a simple public request, formulated in Persian: if you wish to bear witness to your economic situation, write to us, and indicate your income, so that we can measure the gap between the rising cost of goods and the wages of ordinary Iranians. The request circulated on Instagram at a moment when the temporary lifting of internet restrictions, ordered on 26 May 2026 after an 88-day national blackout, made direct expression possible for the first time since the war began.
The material received within days exceeds the rubric of testimony. It constitutes a transversal sample, not statistically representative in the academic sense but broad enough to reveal structures. Among the respondents are construction workers, an aviation subcontractor's mechanic, self-employed shopkeepers, civil servants of small and medium grade, a real estate agent, a mother of a family undergoing chemotherapy, recently married couples, single mothers, unemployed young graduates, artisan-owners of precision machine shops, and a witness to earlier political events whose account has been transferred separately to DORNA's humanitarian channel.
All testimonies retained for this initial collection have been anonymised. Personal identifiers, photographs, and precise location indications have been removed. References to specific Iranian political figures have been replaced by generic descriptions. The report does preserve, however, declared age, income, and the detail of household expenditure, because it is that detail that makes the real economic condition of Iranians in 2026 legible.
Triangulation and limitations
The report articulates the testimonial material with a body of institutional and independent data. On the Iranian side, inflation and wage figures are drawn from publications by the Central Bank of Iran, the Statistical Centre of Iran, the Ministry of Labour, and the Majlis Research Centre. Internationally, the analysis draws on data from the International Monetary Fund, the World Bank, the Bourse & Bazaar Foundation, the Stimson Center, the Atlantic Council, the Clingendael Institute, and the U.S. Congressional Research Service. The independent estimates of Steve Hanke (Cato Institute and Johns Hopkins) on the hyperinflation regime are cited as an upper bound, consistent with the Central Bank and IMF methodologies on the lower and median bounds.
Three methodological limitations must be acknowledged. The first is that figures published by Iranian institutions are politically oriented and show a structural gap with independent estimates; this report therefore cites official sources first, and independent bounds second, flagging each divergence. The second is that the testimonies are declarative and not verified case by case; their value rests on the coherence of their structure and on their cross-reference with sourced macroeconomic data. The third is that the Iranian situation is evolving rapidly, and the indefinite ceasefire established on 21 April 2026 remains fragile; figures and findings are dated as of 4 June 2026.
II. The macroeconomic order of 2026
The currency: a collapse validated by the regime's own institutions
The Iranian rial has lost more than half its value against the U.S. dollar since the June 2025 war began. On 4 June 2026, the free-market rate recorded by the Bonbast and Alanchand platforms stood at 1,747,000 rials per dollar, against roughly 820,000 on the eve of 13 June 20255. The Iranian state maintains in parallel a fragmented three-tier exchange-rate system whose gap with the free market widened over the year 1404, and whose gradual dismantling, in particular the withdrawal of the preferential rate of 285,000 rials per dollar for food and pharmaceutical imports, has been the principal inflationary transmission belt of 140514.
Inflation registered by the Central Bank of Iran stood, year-on-year, at 73.5 % at the end of 1404 (20 March 2026)1. The IMF projects, in its April 2026 World Economic Outlook, an average 2026 inflation of 68.9 % and a real GDP contraction of 6.1 %4. The most contested independent estimate, that of Steve Hanke, derives from observation of the free-market exchange rate an implied monthly inflation of 69.6 %, which places Iran, by Cagan's definition, within a hyperinflationary regime3. The gap among the three measures (official, projected, and derived) is less a methodological dispute than a political indication: the regime's institutions, by themselves publishing inflation above 70 %, have already ceased to protect the fiction of stability.
Food inflation constitutes the most legible marker of the catastrophe. The Statistical Centre of Iran publishes, in February 2026, food and beverage price inflation of 110 % year-on-year, with striking sub-components: 142 % for cereals and bread, 173 % for Iranian rice and 209 % for imported rice, 117 % for meat, 375 % for solid vegetable oil and 308 % for liquid oil, 113 % for fruit2. The Central Bank, more cautious, reports 99 % on the same category. The website IranWire describes this level as the highest recorded since the Second World War.
The Iranian minimum wage is now worth $95 per month, against $238 eighteen months ago.
Wages: a collapse masked by nominal figures
The Iranian Supreme Labour Council fixed, for the year 1405, a minimum wage of 166,255,500 rials per month, that is 16.6 million tomans, presented as a 60 % increase7. At the free-market rate, this sum represents roughly $95. The trade-union reference advocated by the workers' bench, 60 million rials per head and therefore 24 million tomans for a four-person household, corresponded to the subsistence threshold recognised by the Statistical Centre. The government took note of the demand and set a wage more than a third below that baseline. The 60 % revaluation barely covers official inflation; it does not erase the accumulated lag since 2024 and remains well below food inflation at 99–110 %.
The national poverty line published by the Ministry of Welfare for 1404 stands at 6,128,739 tomans per person per month, that is roughly 24.5 million tomans for a four-person household. In Tehran, the Majlis Research Centre, the parliament's analytical arm, has confirmed a threshold above 30 million tomans per household, and independent estimates, notably cited by the newspaper Shargh in September 2025, place the real subsistence threshold above 55 million tomans for the capital8. The gap between the minimum wage and this threshold is no longer a question of social tension; it is an equation of survival: a single-minimum-wage household lives, in 2026, on 30 % of the income recognised as necessary for its subsistence.
The labour market adds a structural asymmetry to this equation. The official unemployment rate published by the Statistical Centre of Iran, 7.6 % for the winter of 1404, rests on a definition of employment that massively understates underemployment and discouragement. Unemployment for young people aged 20–24 stands at 23.1 %, for women in the same age group at 34.9 %, and for women with higher education at 23.3 %15. Iranian union sources anticipate, for the cumulative effect of the February 2026 war and the tightening of sanctions alone, between 3 and 4 million layoffs in the course of the year, and as many as 10 to 12 million jobs at risk, roughly half the active population13.
Poverty: structures and bounds
The absolute poverty rate retained by Iranian parliamentary institutions for 2025 stands at around 30 %, that is roughly 26 million people16. Independent estimates place the range at between 40 and 55 million people in absolute or relative poverty. The Economic Research Forum in Cairo documented, in a study released in September 2025, a cumulative contraction of the Iranian middle class of 28 percentage points between 2012 and 2019. The 2024–2025 data extend this contraction, and the newspaper Shargh, though close to power, coined the term "poor middle class" in September 2025 to describe young graduates holding multiple jobs without maintaining a middle-class standard of living.
Against this internal catastrophe, the regional comparison carries a precise diagnostic weight. Turkey, an economy of comparable size, has brought inflation back to around 32 % year-on-year following the orthodox tightening initiated in 2024. Saudi Arabia, the United Arab Emirates and Kuwait publish inflation rates between 1.7 % and 3 %, supported by their dollar pegs and by hydrocarbon rent. Iraq, exposed to the same Strait of Hormuz closure risks as Iran, maintains inflation around 2 %. The Iranian collapse is not therefore the product of a regional contagion; it is a specific product of the political regime in place in Tehran, of the para-state capture it has locked in, and of the accumulated decisions since 2018.
The two wars and their cumulative effects
The chronological reminder conditions the economic reading. The so-called Twelve-Day War of 13–24 June 2025 struck the nuclear facilities at Natanz, Fordow and Isfahan, the South Pars gas site, and several military and urban targets10. It concluded in a ceasefire without a written agreement. The year 1404 continued in a shortage economy aggravated by the return of UN sanctions through snapback in September 2025, the adjustment of the preferential exchange rate for food imports, and a wave of protests beginning on 28 December 2025, whose repression on 8 January 2026 cost, according to sources, several thousand to more than thirty thousand lives in the first 48 hours12.
The second war, opened on 28 February 2026 by a coordinated wave of American and Israeli strikes, brought the death of Supreme Leader Ali Khamenei in the opening hours of the conflict, the complete closure of Iranian airspace, and the suspension of activity for much of the airport subcontracting sector, with workers sent home unpaid11. This is the pivot date that recurs across several testimonies in our corpus: 9 Esfand 1404. The indefinite ceasefire opened on 21 April 2026 under Pakistani mediation has not ended bilateral violations. The cost of damages, in Iranian estimates consolidated by the Central Bank, falls between $270 and $300 billion; FDD independent estimates place the range at $50 to $300 billion, with a median of $144 billion. The potential environmental consequences of the nuclear strikes, in particular radiological contamination at certain installations, may extend over decades28.
Sanctions, in this landscape, retain strategic weight. The UN snapback reimposed on 28 September 2025 remains legally contested by Moscow and Beijing but operationally recognised by markets and insurers; U.S. sanctions deployed under the Trump II administration target as a priority the shadow fleet and the so-called "teapot" refineries of Shandong, together with the Hong Kong intermediaries that organise their treasury26. Iranian crude exports to China, estimated at 1.5 million barrels per day in January 2026, contracted sharply by roughly 90 % in February–March under the combined effect of the war and secondary tightening; they have recovered partially since April without returning to prior levels27.
III. The voice of Iranians
The testimonies reproduced below were received through the personal Instagram accounts of DORNA members between late May and early June 2026. They have been selected for the diversity of situations they represent and for their capacity to illuminate, in turn, the sectoral structures that the macroeconomic analysis brings to light. Each block reproduces the original Persian text and an English translation. Editorial commentaries, in italics, situate the testimony within the report's broader picture.
a) The threshold of the uninhabitable: food and rationing
دایی من خیلی بدم میاد که کسی بفهمه تو زندگیم چه خبره ولی بعضی وقتا چارهای نیست. شام امشب یک خانواده ۴ نفره اینه👇
"Uncle, I hate that anyone should know what's going on in my life, but sometimes there is no choice. This is tonight's dinner for a family of four."
Announcing the dinner of a four-person household as a fact that must be made known to the outside world, despite the shame attached to doing so, is one of the most direct markers of what 110 % food inflation means inside an Iranian household in 2026.
ما الا نزدیک به ی سال نه گوشت نه میوه نه برنج نخوردیم. من خودم سرپرست هستم، مادر دو فرزند. کار گیرم نمیاد. ی مغازه کوچیک با وامم راه انداختم اونم زدن زمین. الا نه شغل نه درآمد ندارم و نمیدونم بچههامو چکار کنم. ی دختر دهه ۷۰ و ی پسر دهه ۱۳۸۸ دارم.
"For nearly a year we have not eaten meat, fruit, or rice. I am the head of the household, a mother of two. I cannot find work. I opened a small shop with a loan; the shop has been ruined. Today I have neither work nor income, and I do not know what to do for my children. I have a daughter born in the 1990s and a son born in 2009."
The withdrawal of proteins and rice from the food basket is now documented on the scale of full years. For single mothers in informal activity, the loan-investment-bankruptcy chain has become a widespread trap since the margin compression on small commerce in 2024.
سلام با حقوق ۲۵ میلیونی و کارمندی یک خانواده ۴ تفری. فقط داریم میجنگیم برای بقا. تفریح و سفر که هیچ، حتی گوشت و مرغ هم باید حذف کنیم. میوه هم همینطور.
"Hello. With a 25-million-toman salary, civil servant, a four-person family. We are fighting for survival. Leisure and travel are no longer options; even meat and chicken have to be cut from the budget. Fruit as well."
At 25 million tomans a month, the household has less than half the poverty threshold recognised by the Majlis Research Centre. The simultaneous removal of meat, chicken and fruit from the budget is consistent with food inflation above 110 %.
ماهایی که اجاره و خرج بچه و خرج خونه میدیم تنها درآمدمونم یه قرون یارانه و یه دوهزار کالابرگه چیکار باید بکنیم واقعا خسته شدم دیگه از نفس کشیدن.
"Those of us who pay rent, children's costs and household charges. Our only income comes down to a few pennies of yarane subsidy and a 2,000-toman Kala Barg coupon. What are we supposed to do? I am truly exhausted, even of breathing."
The Kala Barg system, a digital rationing card introduced in 2022, together with the yarane subsidy, today covers the symbolic equivalent of about two kilos of chicken per person per month. The word "exhaustion" in this testimony carries a physical fatigue but also a political conclusion.
b) Housing as a daily defeat
سلام وقتتون بخیر، شوهرم کارگر هست ماهی پنجاه میلیون میگیریم ولی حتی نمیتونم بچم کلاس ورزشی ثبت نام کنم. دوازده میلیون اجاره خونهمه، سه تا قسط دارم مال وامی که گرفتیم، خودم و شوهرم هم هر دو مریضیم و مخارج اونم هست. اصلا خرید لباس برا خودم و شوهرم کنسل شده با لباسهای سال قبل میگذرونیم. ولی امسال نتونستم برا بچم لباس تابستونه بگیرم.
"Hello. My husband is a labourer. We earn fifty million tomans a month. I cannot even enrol my child in a sports class. The rent is twelve million a month. We are paying three instalments on a loan. My husband and I are both sick, with medical expenses. Buying clothes for ourselves has been cancelled; we wear last year's. This year I could not buy my child summer clothes."
Rent absorbs 24 % of the gross household income. The Majlis Research Centre has documented that the poverty rate among tenant households in Iran now approaches 40 %, making housing the first factor of poverty fall-through for the urban population.
حدود یک ساله بخاطر بالارفتن دلار شغلم رو از دست دادم و درآمدم صفر شده… یک خونه دارم اجاره دادم ماهی ۱۰۰ میلیون… فقط میتونم شکمم رو سیر کنم و اجاره خونه ۸۰ متری بدم… یک ماشین لباسشویی میخوام بگیرم حداقل ۱۰۰ میلیون قیمتشه… موندم چیکار کنم… نه سفر میرم، نه گوشیم رو عوض میکنم، نه خرج اضافه. تازه یک نفر مجرد هم هستم… نمیدونم مردم چجوری با ۲۰ م زندگی میکنن…
"It has been about a year since I lost my job because of the dollar's rise; my income has fallen to zero. I have a house that I rent out at one hundred million tomans a month. I can barely feed myself and pay the rent on an eighty-square-metre flat. I would like to buy a washing machine, the cheapest costs one hundred million. I do not know what to do. I do not travel, I do not change my phone, I have no extra expenses. I am single; I do not know how people live on twenty million."
The Tehran purchase-to-rent ratio and the impossibility of buying a durable household appliance for the price of a quarter's median wage are the concrete markers of the collapse of the property-owning middle class. This person remains solvent because she holds an asset, but watches her disposable income contract.
c) Health as the variable of adjustment
شبتون بخیر. همسرم از هموطنان باشرفی هست که تا پای جان داره تلاش میکنه. ولی الان شش ماهه که دندون درد دارم. ده تا دندونم مونده از درد هر شب تا صبح بیدارم. در نظر داشتم قسطی برم اوردنچر کنم، انقد وضع اقتصادیمون فاجعهباره که حتی واسه پروتز هم پول نداریم. من حتی پول کشیدن دندونم رو هم ندارم. خیر، سرم ۴۲ سالهمه. تو ایران زندگی کردن با آخوندها مثل مصیبت میمونه. هر روز بدبختی، هر روز خبر بد و هر روز فقیرتر. به خدا بعضی شبها به سرم میزنه کاش فردا رو نبینم. ولی به خاطر دخترم ادامه میدم. تنها امیدم اینه مملکت به سر و سامانی برسه بلکه ما قشر ضعیف هم بتونیم نفس بکشیم.
"Good evening. My husband is one of those honourable compatriots who fight to the last drop. But for six months I have had a toothache. Ten teeth in queue, I am awake every night until morning from pain. I had planned to have a denture fitted in instalments. Our economic situation is so disastrous that we have no money even for the prosthesis. I do not even have money to have the tooth pulled. I am 42 years old. Living in Iran under the akhonds is like living a calamity. Every day misery, every day bad news, every day poorer. By God, some nights a voice tells me I wish I would not see tomorrow. But I continue for my daughter. My only hope is that this country reaches some order, so that our weak class can finally breathe."
Three findings converge. Dental coverage by the Tamin Ejtemai insurance system is residual. The cost of a prosthesis often exceeds a month's wage. The presence of passive death ideation, expressed as an ordinary end-of-day statement, is one of the clinical markers most closely monitored in the literature on major depression in contexts of chronic economic insecurity.
درود، وقت بخیر، همسرم املاکی هست. چهار ماه درآمد صفر داریم. خودم سرطان دارم و تحت شیمیدرمانیام. سه تا بچه دارم. حتی یه دونه پسته یا یه تیکه گوشت نتونستیم تهیه کنیم که وضعیت خون و ضعفم برطرف بشه. لباس و خریدهای دیگه که کلا رویا شده برامون. حتی یه کلاس معمولی بچهمو ثبتنام نکردم.
"Hello. My husband is in real estate. For four months we have had zero income. I have cancer and am undergoing chemotherapy. I have three children. We could not afford a single pistachio, not a piece of meat, to treat my blood condition and anaemia. Clothes and other purchases have become dreams for us. I could not even enrol my child in an ordinary leisure class."
The conjunction of the breadwinner's unemployment, a serious illness requiring specific nutritional intake, and the cost of proteins represents the typical situation that produces the rise in renunciation of care documented in the 2025 longitudinal study on catastrophic health expenditure in Iran, which rose from 8.3 % in 2011 to 14.2 % in 2020, and probably significantly higher in 2026.
d) Devalued labour
من تراشکارم. ۳۰ تا پرسنل داشتم. الان ۱۰ تا دارم. اگه بفروشم، حقوق و بیمه و مالیات و ارزش افزوده ندم، ماهی ۱ میلیارد جلو هستم. ماشینم از عید خرابه. شرکت [نام] بهم پول نمیده. حقوق هم. ۶۰ درصد اضاف کردن استیل قبل عید ۷۰۰ هزار، برج ۲ شد ۱ میلیون و دویست.
"I am a turner. I had thirty employees, I have ten today. If I were to sell and pay no salaries, no insurance, no taxes, no VAT, I would be ahead by one billion tomans a month. My car has been broken since Norouz. The company [name] does not pay me. They no longer pay salaries either. Steel has risen by 60 %. Before Norouz, 700,000 tomans, in the second month of the year, 1.2 million."
This precision-shop owner describes a central mechanism of the destruction of the Iranian manufacturing fabric: the gross margin of a productive enterprise is fully absorbed by social charges, the rise of inputs, and unpaid receivables from clients. Iranian industrial subcontracting, exposed to clients themselves in difficulty, sees its payment capacity unravel in a chain.
درود جناب تدین، همسر من از پرسنل پیمانکاری شرکت هواپیمایی هستند که از ۹ اسفند به خاطر جنگ دیگه سر کار نرفتن و هیچ حقوقی هم دریافت نکردند. متاسفانه مستأجر هم هستیم و هیچ درآمد دیگهای هم نداریم. نه شرکت پیمانکار گردن میگیره حقوق بده، نه هواپیمایی گردن میگیره برا حقوق. واقعا نمیدونیم باید چیکار کنیم با این اوضاع سرسامآور گرونی. واقعا دلم میخواد این قضیه جهانی بشه تا آبروی این بیشرفها تو کل دنیا بره.
"Hello. My husband is part of the subcontracted personnel of an airline. Since 9 Esfand (28 February 2026), because of the war, he has not gone to work and has received no salary. We are tenants and have no other income. Neither the subcontracting firm nor the airline assumes payment. We truly do not know what to do in this dizzying inflation. I sincerely wish that this matter would become global, so that the dishonour of these dishonourable ones spreads around the world."
9 Esfand 1404 (28 February 2026) is the opening day of the 2026 U.S.–Israeli–Iranian war. Iranian civil aviation subcontractors received instructions to keep their contract employees at home, under a status with no social protection and no severance right29.
درود آقای [نام]. بنده یه جوون ۳۳ سالهام. نزدیک به ۲ سال هست عقد کردم. درآمدم تقریبا ۳۰ تومنه در ماه. اما هنوز نتونستم جهیزیمو تکمیل کنم. هم خودم و هم همسرم شب و با اشک و گریه به صبح میرسونم. تو این ۲ سال نصف موهام سفید شده. یه ماشین لباسشویی بنجول ایرانی شده ۹۰ میلیون. آخه من کارگر از کجا باید بیارم؟ حرف میزنیم، میشیم جاسوس اسرائیل و خائن و وطنفروش. طوری شده که دیگ ب خدا هم ایمانی ندارم و شب و روز فحشش میدم با این عدالتش. ب روح پدرم خستهام. امروز رفتم تا مرز خودکشی.
"Hello. I am 33 years old, engaged for nearly two years. My income is roughly 30 million tomans a month. I have still been unable to complete the dowry (jahizieh). My fiancée and I weep through the night until morning. In two years, half my hair has gone white. A low-quality Iranian washing machine costs ninety million tomans. As a worker, where am I supposed to find it? If we protest, we become spies of Israel, traitors, sellers of the homeland. I have reached the point where I no longer have faith in God; I curse him day and night for this justice he accepts. By my father's soul, I am exhausted. Today, I went to the brink of suicide."
The cost of an Iranian marriage, structured around the trousseau and household equipment, becomes inaccessible to an income that nonetheless lies above the minimum wage. The political function of the testimony is legible in the phrase reporting the criminalisation of speech. The suicidal threshold is here verbalised without euphemism.
بیکار شدم به دلیل تعدیل نیرو. تحصیلکرده دانشگاه تهرانم. دوتا گربه حمایتی دارم. واقعا لعنت بهشون. زندگی و جوونیرو بهمون زهر کردن. مرغ خریدن شده آرزو. اگر بخاطر گربههام نبود، نمیخواستم یک لحظهام تو این مملکت زنده بمونم.
"I have been made redundant. I am a University of Tehran graduate. I look after two foster cats. Curse them. They have poisoned our life and our youth. Buying chicken has become a dream. Were it not for my cats, I would not wish to stay alive a single moment in this country."
The profile of a public-university graduate made redundant for staff reduction is now common. The Iranian Minister of Science acknowledged, in late 2024, that 25 % of professors had left the country. Iranian brain drain consistently ranks among the world's highest.
IV. Structural reading, an organised collapse
The conventional diagnosis of the Iranian economy attributes inflation and the fall of the rial to the combination of international sanctions and macroeconomic mismanagement. This reading is honest but incomplete. It leaves intact the central question: why, under equivalent sanctions pressure, would an Iran without the Islamic Republic present a very different economic profile from the one observed in 2026? The answer lies in the regime's extractive architecture, in the para-state capture that constitutes its productive core, in the political management of the subsidy system, and in the institutional lock-in that forbids democratic correction. Four elements illuminate this architecture.
Para-state capture
The share of the formal Iranian economy controlled by the Revolutionary Guards, the religious foundations (bonyads) and the holdings tied to the Supreme Leader's office is, according to aggregated estimates from the Clingendael Institute, the Stimson Center and U.S. Treasury designations, above half of GDP when one consolidates Khatam al-Anbiya (the Guards' construction conglomerate), the Setad (Execution of Imam Khomeini's Order), Astan Quds Razavi, and Bonyad Mostazafan17. This consolidation is not a rhetorical figure: the Iranian draft budget for the year 1404 directly allocated 51 % of hydrocarbon export revenues, roughly €12 billion, to the IRGC and the security forces18. The security-religious complex constitutes the productive backbone of the regime, not its excrescence.
The patrimony effectively controlled by the Supreme Leader's office sits between the lower bound established by Steve Stecklow and the Reuters team in 2013 (95 billion dollars for the Setad alone) and the consolidated upper bound estimated in 2024–2026 at around 200 billion dollars once Astan Quds Razavi and Bonyad Mostazafan are aggregated19. The mechanism of constitution of this patrimony, documented in Iranian legal archives, rests on the systematic seizure of assets belonging to religious minorities (in particular Baha'is), political dissidents and expatriates, complemented by the preferential allocation of market positions in finance, telecommunications, energy and real estate. This extractive scheme is self-reinforcing: every foreign sanction that complicates international market access for ordinary operators widens the competitive advantage of para-state operators, who are able to absorb the cost of evasion.
Structural inversion of subsidies
The Iranian subsidy system, heir to the Islamic Republic's broad economic lines since 1979, has reached a level of regressivity such that the economist Djavad Salehi-Isfahani has described a net transfer from the bottom of the ladder to the top. Subsidised fuel benefits in priority the high-mileage vehicles of the upper classes, para-state logistics fleets, and cross-border smuggling networks. President Pezeshkian himself acknowledged in 2024 that 20 to 30 million litres of fuel leave the territory illegally each day, including up to 6 million through the Pakistani border alone20. The logistical and political organisation of this smuggling passes through border posts that the Guards control.
The Kala Barg system and the yarane subsidy, intended to compensate the poorest households, are in 2026 of symbolic efficacy. The testimonies reproduced in the previous section place their value at a few pennies of subsidy and a 2,000-toman coupon. The political translation of this structure can be stated in a sentence: the poorest households receive nominal aid denominated in a currency depreciating by 100 % over eighteen months; meanwhile, the effective rents of the para-state complex remain denominated in real goods and in exchange-rate arbitrage.
Sanctions evasion and capital flight
The Iranian system combines exposure to sanctions and a sophisticated organisation of evasion. The Iranian shadow fleet, operating via at-sea cargo transfers in the Gulf of Oman and around the Strait of Malacca, flag changes, document falsification, and intermediary companies in the United Arab Emirates and across Asia, ships some 1.5 million barrels per day to the independent refineries of Shandong in China26. The U.S. Treasury has designated five of these since March 2025, notably Shandong Shouguang Luqing Petrochemical and Shandong Shengxing Chemical. The rent from these flows does not feed the Iranian economy as a whole; it feeds the structures that control their routing.
At the other end of the chain, the flight of Iranian capital abroad is massive and documented. Aggregated estimates from outlets close to the regime (Kayhan) speak of at least $32 billion in annual capital flight, on top of $36 to $60 billion lost to smuggling. The Bourse & Bazaar Foundation and the Hudson Institute have documented the massive acquisition of Iranian real-estate assets in Dubai, in Istanbul (Iranians were the top group of foreign buyers in the Turkish real-estate market for several years post-2018), and in Toronto21. The operational targeting of offshore assets linked to the Iranian nomenklatura, in particular by the U.S. Treasury and by the European asset-freezing mechanism, therefore constitutes a lever of action and not a collateral effect of sanctions.
Political lock-in
This extractive architecture sustains itself only at the price of a political lock-in that forbids internal correction. The 2024 legislative elections saw, of 48,847 declared candidacies, 15,200 retained by the Guardian Council. Turnout stood at 41 %, the lowest in the Islamic Republic's history, with roughly 5 % of invalid ballots as an explicit signal of protest22. The presidential election of the same year brought Massoud Pezeshkian to the executive, but his room for manoeuvre was restricted from inauguration, and the death of Supreme Leader Ali Khamenei on 28 February 2026 triggered a succession whose sequence is itself instructive. The Assembly of Experts, under documented pressure and repeated contacts emanating from the IRGC, invested Mojtaba Khamenei on 9 March 2026 as third Supreme Leader23. This was the first dynastic devolution of supreme religious power since the regime's founding.
The repression of the uprising of late December 2025 and 8 January 2026, the mass killings documented by Amnesty and HRANA, and the pace of executions confirm the regime's political function. ECPM recorded at least 1,639 executions in calendar 2025; the cumulative March 2025 – March 2026 figure exceeds 2,657, more than double the prior year9. Since 28 February 2026, Amnesty International has counted more than six thousand arbitrary arrests and at least 39 political executions in fewer than two months25. The criminalisation of poverty, captured in one of the testimonies by the report that the courts now grant priority to sentencing protesters rather than to the recovery of compensation owed to a worker, is no longer a metaphor.
V. Indicators to watch through autumn 2026
This report is dated as of 4 June 2026. The indicators below require attentive monitoring, since their trajectory will condition the reading of upcoming international decisions.
On the monetary front: the free-market IRR/USD rate, the spread between the free-market rate and official rates, and the pace of withdrawal of remaining preferential rates for essential imports.
On the humanitarian front: the monthly UNHCR figures on displacement at the Armenian, Turkish, Pakistani and Iraqi borders; the actual availability of WHO essential-medicines list items in the pharmacies of Tehran, Mashhad, Tabriz and Shiraz.
On the political front: the public resolution of the status of President Massoud Pezeshkian, whose resignation reported in late May 2026 was denied without a public retraction by Pezeshkian himself30; the confirmation or invalidation of the effective leadership of new Supreme Leader Mojtaba Khamenei vis-à-vis the IRGC; the weekly rhythms of political executions relayed by Amnesty International and HRANA.
On the legal front: the evolution of the Russian-Chinese position on the validity of the UN snapback; the decisions of European courts on actions to freeze assets linked to the Iranian nomenklatura in the United Arab Emirates and in Turkey; the progress of the dossiers documenting the January 2026 massacre before the Human Rights Council in Geneva.
Notes and sources
- Central Bank of Iran, monthly CPI series, year-on-year, end of Esfand 1404 (20 March 2026); reproduced in Bourse & Bazaar Foundation, FX & Inflation Reports, April 2026.
- Statistical Centre of Iran, consumer price index, food and beverages, February 2026; reproduced by Al-Jazeera, "Food inflation hammers households in war-hit Iran", 10 May 2026.
- Steve H. Hanke, Troubled Currencies Project, Cato Institute and Johns Hopkins, monthly estimate at 69.6 %, equivalent to a hyperinflationary regime in the Cagan sense; AIER, "Hanke Uncovers Iranian Currency Hyperinflation", 2026.
- International Monetary Fund, World Economic Outlook, April 2026: Iran, average 2026 inflation estimated at 68.9 %, real GDP contraction at –6.1 %.
- Bonbast and Alanchand, free-market IRR/USD rate, recorded on 4 June 2026: 1,747,000 rials per dollar.
- Iran International, "Iran's minimum wage fell from $238 to $90", 8 October 2025; Euronews, "Iran raises minimum wage by 60 percent", 17 March 2026.
- Supreme Labour Council, 1405 minimum-wage decree: 166,255,500 rials per month; ILNA reporting on the position of workers' representatives.
- Ministry of Welfare and Social Security, 1404 national poverty threshold: 6,128,739 tomans per person per month. Majlis Research Centre, public hearing of November 2025: Tehran poverty threshold above 30 million tomans per household, independent estimate above 55 million tomans for a four-person household.
- ECPM, 2025 annual report; Amnesty International, 2026 updates; cumulative March 2025 – March 2026: at least 2,657 executions, more than double the prior year.
- ISIS-Online, Post-Attack Assessment of the First 12 Days of Israeli Strikes on Iranian Nuclear Facilities; CFR, US, Israel Attack Iranian Nuclear Targets, Assessing the Damage; chronology 13 to 24 June 2025.
- Reuters, AP, Al-Jazeera, House of Commons Library briefings CBP-10521 and CBP-10637 on the 28 February 2026 opening and the indefinite extension of the ceasefire to 21 April 2026; FDD, Operation Epic Fury impact study, April 2026.
- Amnesty International and HRANA, January and February 2026 communiqués; victim estimates partly contested, low-end documented at several thousand, high-end attributed to an internal Iranian Health Ministry note above thirty thousand dead in the first 48 hours.
- Iran International, May 2026, citing union sources; documented cases of Digikala, Kamva, and Qazvin and Marvdasht textile plants.
- World Bank, Iran Economic Monitor, April 2026: gradual withdrawal of the 285,000 rials/dollar preferential rate for essential imports.
- Statistical Centre of Iran, quarterly labour force survey, winter 1404. Women aged 20 to 24: 34.9 % unemployment; women with higher education: 23.3 %.
- World Bank, Iran MPO; ERF study of 30 September 2025, documenting a cumulative middle-class contraction of 28 points between 2012 and 2019, extended in 2024 and 2025.
- U.S. Department of the Treasury, January 2021 designations covering Execution of Imam Khomeini's Order (Setad), Astan Quds Razavi and Bonyad Mostazafan; Clingendael, Beyond the IRGC: The rise of Iran's military-bonyad complex.
- Iran International, "Khamenei, IRGC boost share of Iran's oil revenues and state assets", April 2025: 1404 draft budget allocating 51 % of hydrocarbon export revenues to the IRGC and the security forces.
- Reuters investigation series Assets of the Ayatollah by Steve Stecklow et al., 2013; aggregated update bringing the patrimony under effective control of the Supreme Leader to roughly $200 billion when Setad, Astan Quds Razavi and Bonyad Mostazafan are consolidated.
- Iran Chamber of Commerce; admission by President Pezeshkian (2024): 20 to 30 million litres per day of fuel smuggling; RFE/RL and Iran News Update on the Pakistan route (up to 6 million litres per day).
- Bourse & Bazaar Foundation, The Shadow of Sanctions in Istanbul's Housing Market, December 2023; Iran International, "Iranians Still Among Top Foreign Buyers Of Turkish Real Estate", March 2024; Hudson Institute, How to Target Iran's Kleptocracy.
- International Crisis Group, Closing Circles: Iran's Exclusionary 2024 Elections; Stimson Center, Iran's Faustian 2024 Elections: 41 % turnout, lowest in the regime's history.
- Aggregated source: Iran International and Wikipedia, "2026 Iranian supreme leader election", March 2026; investiture of Mojtaba Khamenei as third Supreme Leader on 9 March 2026, under documented pressure of the Assembly of Experts.
- ACLED, Middle East Special Report, March 2026; Amnesty International, "Iran: Wave of Arbitrary Arrests and Political Executions", April 2026.
- U.S. Department of State, Maximum Pressure with Sanctions Targeting Iran's Shadow Oil Economy, fact sheet, May 2026; OFAC, designations of Shandong independent refineries and Hong Kong intermediary networks.
- Stimson Center, Iran's Oil Exports: Resilience Amid Sanctions and Snapback, 2025; Clingendael, Sanctions without Shock? United Nations Snapback and Iran's Oil Exports.
- Bulletin of the Atomic Scientists, July 2025: potential environmental consequences of strikes on nuclear sites.
- Kayhan Life, IBTimes and Times of Israel, March-May 2026 on Iranian airport subcontracting: IKA and Mehrabad partially closed, subcontractor instructions to contract staff to remain at home.
- Iran International, late May 2026: reported resignation letter from President Massoud Pezeshkian to Supreme Leader Mojtaba Khamenei, declaring the government excluded from real decision-making.