Iran-US MoU Halves 99% Inflation Rate, Cutting Dollar 15% Amid War
Updated
Updated · Responsible Statecraft · Aug 21
Iran-US MoU Halves 99% Inflation Rate, Cutting Dollar 15% Amid War
3 articles · Updated · Responsible Statecraft · Aug 21
Summary
Iran’s annual inflation rate fell by half last month after the June 17 Memorandum of Understanding with the U.S. knocked 15% off the dollar during a brief lull in fighting.
99% annual inflation the month before had been driven by war costs, sanctions and a blockade that squeezed oil revenue and pushed the government toward money printing to sustain cash transfers.
Spring 2026 data still showed only a 0.21% year-on-year GDP contraction, even as nearly 500,000 jobs vanished by June and unemployment rose to 9.1% from below 8%.
2025 GDP per capita was 9.6% above 2018 on a constant-price PPP basis, and prewar household surveys showed rising real spending and falling poverty, suggesting stagnation rather than imminent collapse.
That resilience rests on redistribution and flexible prices, but prolonged war, attacks on utilities and supply disruptions could still force rationing if food and fuel shortages deepen.