Iran Grapples with Soaring Food Costs Amidst Economic Crisis

Inflation Reaches Critical Levels

Iran is currently experiencing a profound economic crisis, with citizens facing a dramatic surge in prices for food and daily essentials. The annual inflation rate climbed to 46.3% for the 12 months ending February 19, 2026, according to the Central Bank of Iran. The Statistical Center of Iran (SCI) reported an annual inflation rate of 44.6% by late January 2026. More critically, point-to-point inflation for food items escalated to nearly 90% in January 2026, a significant jump from 72% in December 2025. Monthly inflation for food, beverages, and tobacco alone surged by 13.8% in January, setting a new record.

Deepening Economic Hardship for Citizens

The escalating costs have severely impacted the purchasing power of Iranian households. The middle class is under immense financial strain, with salaries increasingly insufficient to cover basic necessities like rent, groceries, and medicine. Many families are reportedly reducing protein consumption or opting for cheaper food alternatives. Reports indicate that meat has become a luxury item, and as many as 7 million Iranians have experienced hunger. In 2024, 57% of Iranians were reported to be experiencing some level of malnourishment. The minimum monthly wage in 2026 stands at approximately 110-120 million rials (around $120-$130 USD), while estimates suggest a family of three requires at least $500 USD for basic survival. Over 40% of Iranian households are now living below the poverty line, with nearly half the population suffering from malnourishment.

Key Drivers of the Crisis

Several interconnected factors contribute to Iran's soaring food costs:

• Currency Devaluation: The Iranian rial has undergone a drastic devaluation, reaching 1.6 million rials to the US dollar in February 2026. This makes imported goods, including essential food items and agricultural inputs, significantly more expensive.
• International Sanctions: Reimposed international sanctions, particularly by the United States and the United Nations in September 2025, continue to restrict Iran's access to global markets and limit oil exports. These sanctions increase the costs associated with foreign trade, transportation, and financial transactions.
• Government Policy Changes: A key driver of the recent price surge was the government's decision in January 2026 to eliminate subsidized dollars for essential imports. This move, aimed at stabilizing the foreign exchange market and curbing corruption, directly led to sharp price increases for basic goods.
• Domestic Mismanagement: Long-standing issues of domestic mismanagement, rampant corruption, and structural inefficiencies within the economy are also cited as significant contributors to the crisis.

Government Response and Public Unrest

In response to the escalating crisis, the Iranian government has implemented some measures. In January 2026, it began distributing monthly payments of 10 million rials to approximately 70 million people, representing about 75% of the population, to assist with food purchases. The government has pledged to increase these payments if prices continue to rise. Additionally, President Masoud Pezeshkian has expanded powers for provincial governors to ensure the uninterrupted supply of essential goods and has introduced new food subsidies alongside a five-year agricultural support program. The government has also issued warnings against hoarding and overpricing by suppliers.

However, the severe economic conditions and rising inflation have ignited widespread protests across all 31 provinces since late December 2025. These demonstrations, initially sparked by economic grievances, have evolved to include broader anti-government sentiments.