The ongoing conflict between Iran and the U.S. has intensified an economic crisis that is pushing millions of middle-income families toward poverty [1].
This shift threatens the stability of Iran's social fabric. As the middle class, traditionally a pillar of urban stability, loses its purchasing power, the risk of widespread domestic unrest increases.
The economic pressure stems from a combination of active warfare, strict Western sanctions, and a decline in oil revenues [1], [4]. These factors have eroded real incomes and fueled inflation, making basic household budgets unsustainable for many families [1], [4].
Reports indicate that millions of middle-income families are slipping closer to poverty [1]. The crisis has not only affected private households but has also severely hurt local businesses that rely on middle-class consumption [1], [2].
There is a debate regarding the primary driver of this hardship. Some reports said the war itself has intensified the crisis and is the main force pushing families toward poverty [1]. Other reports said that Western sanctions are the primary factor hurting the middle class [4].
Regardless of the primary cause, the result is a squeezed economy. The escalation of the conflict since 2024 has left many Iranians unable to maintain their previous standard of living [1], [3].
“millions of middle-income families are slipping closer to poverty”
The erosion of the Iranian middle class removes a critical economic buffer, potentially shifting the country's social dynamics. If a significant portion of the professional and educated class falls into poverty, the government may face increased internal pressure, complicating its ability to manage the external conflict with the U.S.
