iran gdp plummets 10.1% in first quarter of persian calendar amid us-led war
Iran’s gross domestic product shrank 10.1% year-on-year in the first quarter of the Persian calendar (late March to late June), the Statistical Center of Iran reported, marking the steepest contraction since the…
Source: Free Malaysia Today · September 21, 2026 at 12:31 AM · AI-assisted report
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KUALA LUMPUR, 21 SEPTEMBER 2026 —
Iran’s gross domestic product shrank 10.1% year-on-year in the first quarter of the Persian calendar (late March to late June), the Statistical Center of Iran reported, marking the steepest contraction since the US-Israeli offensive began in late February.
Market Impact
The war’s direct impact on Iran’s economy is evident in its 10.1% GDP decline—more than double the 4.8% contraction recorded in the same period a year earlier—according to the Statistical Center of Iran. The conflict, which began with US-Israeli strikes that killed Iran’s supreme leader and senior military officials, has disrupted trade, oil flows, and global financial markets, with Tehran’s retaliation in blocking the Strait of Hormuz sending crude prices to multi-year highs.
The contraction reflects broader economic pressures, including hyperinflation and the rial’s devaluation, which have been exacerbated by long-standing US sanctions. The central bank reported inflation at 51.4% year-on-year in June, while the rial has lost nearly 60% of its value against the US dollar since the start of the year, according to market data.
Economists warn the downturn will deepen as sanctions tighten and regional instability persists. The International Monetary Fund had already forecast Iran’s GDP to shrink 3% in 2024 before the war escalated, but the conflict risks accelerating capital flight and further isolating Tehran’s financial system. The government has signaled limited fiscal tools to mitigate the crisis, with budget deficits already exceeding 5% of GDP.