A Widespread Recession Across Growth Drivers
As Iran's macroeconomic indicators one by one enter a critical state, both official and international reports point to a deepening recession, soaring inflation, capital flight, the collapse of the rial (the country’s official currency), and growing security threats fueled by economic turmoil. This report explores the various dimensions of this crisis.
In a report focusing on Iran's economic growth structure, the Samt newspaper notes that economic growth relies on several key factors: a conducive business environment, sound economic governance, access to technology, financial resources, and more.
Each of these elements can be seen as an engine driving economic growth. However, the report emphasizes that all of Iran’s economic growth engines are currently out of service.
The Snapback Mechanism and a Bleak Growth Outlook
Following the activation of the snapback mechanism, the Iranian Chamber of Commerce released a report titled “Economic Impacts of the Reinstatement of UN Security Council Sanctions”, presenting three scenarios for Iran's economy through the end of 2025: optimistic, likely, and pessimistic.
Alarmingly, all three scenarios project negative economic growth. In the worst-case scenario, the exchange rate is expected to reach 1,650,000 rials per dollar, and inflation could soar to 90%. Given the current political climate, this scenario is seen as the most probable.
Security Crackdown on Economic Forecasts
After the report’s publication, security sources reported that Iran’s Islamic Revolutionary Guard Corps (IRGC) intelligence forces entered the Chamber of Commerce on September 6 and interrogated members of its International Affairs Department.
Simultaneously, Hamshahri newspaper, affiliated with Tehran’s municipality, accused the Chamber of inciting unrest, stating that publishing such figures could trigger inflationary expectations and further destabilize the market.
In response to these criticisms, the Chamber’s Research Center distanced itself from the report, denying its official endorsement.
At the same time, the Ministry of Culture and Islamic Guidance issued a confidential directive to media outlets, demanding tight restrictions on coverage of the snapback issue and instructing them to avoid any headlines or commentary that may be "emotional," "crisis-inducing," or "provocative," urging instead a narrative that would “preserve public psychological calm.”
Behind-the-Scenes Fear and Contradictory Messages
A classified letter from the Ministry of Intelligence further revealed that official concerns go beyond public statements, showing real fear about the potential fallout of the snapback mechanism.
In contrast, Foreign Minister Abbas Araghchi stated that the effects of the mechanism had been exaggerated and presented to the public as more severe than they actually are.
When No Negative Growth is Framed as a “Success”
The Samt report also quotes an economist who argues that, given the current conditions, even avoiding negative growth should be considered an achievement. According to data from Iran’s Statistical Center, the economic growth rate for autumn 2024 was only 1.6%, the lowest since winter 2020. The housing sector—one of the key drivers of the economy—has entered a deep recession, affected by political instability, declining purchasing power, water shortages, and land subsidence.
IMF Projections: Stagnation Ahead
In its latest report, the International Monetary Fund (IMF) predicts that Iran’s economy will grow by just 0.3% in 2025, with inflation reaching 43.3%.
These forecasts are based on official data from the Islamic Republic, particularly from the Central Bank, and even this modest growth is only feasible under optimistic assumptions.
Furthermore, projected droughts in agriculture and unexpected energy shortages have already diminished overall productivity.
In 2024, at least one Iranian province faced 72 working days of closures due to gas or electricity shortages. The Minister of Energy has already warned that 2025 will be even worse.
According to independent estimates, each day of shutdown costs the economy around 50 trillion rials—a significant burden for a country with a GDP of approximately $405 billion.
Capital Flight Persists Despite Trade Surpluses
Despite trade surpluses in recent years, capital continues to flow out of Iran.
According to the Central Bank, around $14 billion left the country during the first nine months of last year, compared to $20 billion the previous year.
Meanwhile, the IMF projects that Iran’s exports will fall by 16% in 2025, down to $100 billion, while imports are expected to drop by 10%, to $98 billion.
This would leave a trade surplus of only $2 billion, down from $10 billion the year before.
Rial Collapse and the Real Shrinking of the Economy
One of the most telling indicators is nominal GDP, which reflects the size of an economy in current prices and U.S. dollars.
According to the IMF, Iran’s nominal GDP is expected to fall to $341 billion in 2025—$60 billion less than in 2024.
The main reason is the severe depreciation of the rial, which lost half its value over the past year.
Although GDP measured in constant prices (based on 2016) may appear stable, in reality, Iran’s economy is shrinking significantly.
Back in 2000, Iran’s economy was larger than those of Saudi Arabia, Turkey, and the UAE. Today, Saudi Arabia’s economy is three times larger, Turkey’s four times, and the UAE’s 1.6 times larger than Iran’s.
Mounting Social Instability and the Risk of Unrest
Amid growing economic distress, officials within the Iranian government have repeatedly warned of the possibility of widespread protests, similar to those in 2019 and 2022.
On March 31, 2025, Ali Khamenei referred to “domestic agitators” as the main enemy in a public speech—clearly referencing organized opposition protests, which security agencies attribute to resistance units affiliated with the MEK (Mujahedin-e Khalq), known for their role in the uprisings of 2018 and 2022.
