By Esfandyar Batmanghelidj and Ezana Tedla
Since February, the Iranian economy has faced a war that damaged its industry, inflation that has further eroded consumer sentiment, and an ongoing U.S. blockade of its ports. Since June, however, the severity of its economic contraction has abated, and resilience in parts of the economy has allowed the government to withstand U.S. pressure.
We examine how large the contraction has been and how output has moved since June. We do so by looking at headline GDP data alongside micro-level data on sectors and firms, and by comparing Iran with other economies that have faced war or other severe restrictions.
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