Watch: Reaching One of These 4 Points by 1407

Iran's economy in the second half of 1405 is no longer facing only 'high inflation' or 'sanctions.' A set of simultaneous currency, trade, financial, monetary and military shocks has hit an economy that, even before the war, was already struggling with bank imbalances, budget deficits, declining investment and the erosion of household purchasing power.

The political service of "Choice": Iran's economy in the second half of 1405 is no longer faced with the issue of "high inflation" or "sanctions"; A series of foreign exchange, commercial, financial, monetary and military shocks have hit the economy at the same time, which before the start of the war was struggling with bank disharmony, budget deficit, reduction of investment and erosion of purchasing power of households.

The latest statistics of the Iranian Statistics Center provide an unprecedented picture of this situation. Point-to-point inflation in August 1405 has reached 89% and annual inflation has reached 69.9%. The point inflation of the food and beverage group was 127.5%; This means that the cost of a similar food basket has more than doubled compared to last August. The annual inflation rate for the second decade was 78.3%, while it was 67.6% for the tenth decade.

On the production side, the situation is equally worrying. According to the latest national accounts of the Statistics Center, the economic growth in the spring of 1405 including oil was negative 10.1% and without oil was negative 4.6%. This means that the current shock has not only targeted the government's income or people's purchasing power, but has also hit the production capacity of the economy itself.

In the foreign exchange market, the Azad dollar crossed the border of 230 thousand tomans in Shahrivar and even rates of 235 thousand 500 tomans were recorded; At the same time, the Imami coin reached the range of 240 million Tomans.

On the other hand, the condition of oil export has become very serious. Reuters reported that Iran's crude oil exports fell from around two million barrels per day in March 2026 to around 220,000 to 255,000 barrels per day in August.

Therefore, the main question for the next two years is no longer "will Iran's economy get better or worse?" Rather, it is which political and security path will be chosen and what effect will each path have on the four pillars of Iran's economy?

First scenario: limited agreement; Re-opening of Hormuz and Ra-Hasef and partial removal of sanctions

In this scenario, Tehran and Washington reach a limited agreement; The conflict will be stopped or controlled, the Strait of Hormuz will be reopened, some of the blocked assets will be released, and the possibility of selling Iranian oil will increase, but not all sanctions will be lifted at once. Economically, this scenario is more like artificial respiration than a complete reconstruction of the economy.

The first market reaction will probably happen in the currency market. By reopening Hormuz, reducing the risk of war and increasing the access of the government and exporters to the currency, a large part of the "political risk" will be removed from the price of the dollar.

As a result, there is a possibility of a significant drop of the dollar compared to the current critical levels. But this decrease does not necessarily mean that the dollar will return to the figures of previous years. Because part of the increase in the exchange rate is no longer caused by war; Rather, it is the result of years of accumulated inflation, the growth of liquidity and the weakening of the rial.

The same applies to gold and coins. By reducing the exchange rate, the coin can move away from its war bubble, but the price of gold depends on the international price of gold in addition to the domestic dollar. Therefore, even if there is an agreement, it is not reasonable to expect the coin to return to 40 million tomans - that is, the level at the beginning of the medical government. For the household, the effect of the agreement appears more in the reduction of the rate of impoverishment than in the rapid return of purchasing power.

The opening of Hormuz will be the most important change. Iran's maritime trade will become more feasible again and the cost of insurance, transportation and supply of goods will decrease.

Currently, Iran has turned to land routes to compensate for maritime restrictions and has expanded its land trade; The Financial Times reported a sharp increase in the use of the Turkish route and a 250% growth in Iranian imports from the Gorbulak route in early 2026, but at the same time emphasized that the land route cannot fully compensate for the capacity and cost of sea trade.

In the limited agreement scenario, the import of raw materials and intermediate goods will recover faster, and non-oil exports will also benefit from the reduction in exchange costs.

Economic growth or GDP

Probably, the first effect of the agreement will be to stop the fall, not an economic boom. The economy, which shrank by 10.1% due to oil in the spring of 1405, must first overcome the war shock in order to return to positive growth. Even the IMF predicted a negative growth of 5.4% in 2026 and limited positive growth in the following year for Iran in its July 2026 estimate.

In the case of a limited agreement, the oil sector can recover faster than other sectors; But industry, construction and investment need more time.

In this situation, the Tehran Stock Exchange can show a positive reaction, especially export companies and companies that benefit from reducing the risk of foreign trade. But there is an important point: the stock market can nominally grow without the real wealth of shareholders increasing as much.

If the inflation is still 40-60%, the growth of the index does not necessarily mean the return of purchasing power.

On the other hand, the government's greater access to currency and oil can reduce the need to monetize the budget deficit. This is the most important channel of the agreement's effect on inflation.

The second scenario: attrition conflict (neither war nor peace) and the continuation of heavy sanctions until the end of Trump's term

In this scenario, neither a stable agreement is formed, nor does the war turn into a full-scale conflict; Rather, the embargo, limited attacks, military threats, disruption of trade and pressure on oil exports will continue until the end of the Madhyamian government.

This scenario is dangerous for Iran's economy in one way: the economy gets a chance to adapt, but it doesn't get a chance to rebuild.

In this case, the exchange rate is likely to maintain its upward path, but not necessarily in a straight line. There may be periods of stabilization or even decline, but with any security shock, the market will move back to the dollar, gold and coins.

More important than the level of the dollar is the speed of its increase. If the economy reaches a state where the economic operator cannot predict his expenses for the next three months, long-term investment becomes almost impossible. Even on the contrary, the process of capital outflow from the country will probably become more intense.

Inflation also remains high in this scenario due to the combination of supply reduction, currency jump, budget deficit and money growth. The monetary base had grown by 61.5% at the end of 1404; While this figure was around 24.5% in 1403.

So even if the war shock subsides temporarily, the economy still faces an internal problem: money that has already been created.

Iran becomes more dependent on land trade, China, neighboring countries and informal payment networks. But such a business costs more.

The issue is not that Iran cannot import goods; The problem is that each unit of goods imports more expensive and with more risk. This cost is ultimately passed on to the consumer.

In this scenario, the real growth of the economy is likely to remain in the zero or negative range. Oil below capacity, foreign investment close to zero, capital depletion and uncertainty, the economy is on the same path as the current "chronic deflation".

Before the current crisis worsened, the World Bank had estimated the growth of Iran's economy in the fiscal year 2025/26 at a negative 2.7 percent and emphasized that the future path is highly dependent on the duration of the war, infrastructure damage, oil exports, and trade routes.

In this scenario, the stock market will probably become a relative shelter for capital against the Rial, but this does not mean real prosperity. The nominal growth of the index can be mainly the result of inflation.

The Tehran Stock Exchange index reached about 7.45 million units on September 28 and has recorded significant daily growths in recent weeks.

But in an economy with nearly 70% inflation, the index should be compared with inflation and the dollar, not just with its nominal number.

The third scenario: maximum agreement and acceptance of mutual terms

This scenario is fundamentally different from a limited agreement. It is assumed that Iran and the United States reach a broad agreement that, in addition to stopping the conflict, includes a serious reduction in oil and financial sanctions, the release of a large part of blocked assets, the return of maritime trade, political guarantees and the creation of a framework for foreign investment.

In such a case, Iran's economy can benefit from a positive supply and currency shock.

The first thing is the drastic reduction of inflationary expectations.

When the economic activist is sure that oil will be exported again, money will enter the country and the probability of war will decrease, the precautionary demand for dollars and gold will decrease. But again, we should not expect inflation to go from 70% to 10% in a few months. The reason is simple: prices have gone up once, and deflation does not mean they are getting cheaper.

If inflation drops from 70% to 30%, prices are still rising, just at a slower rate. To restore household purchasing power, inflation must be lower than wage growth for several years.