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Could Iran’s escalating economic crisis weaken negotiating position with US?

War has combined with battered economy to leave Tehran wondering how hardline it can afford to be

Iran may not be choking like a stuffed pig as Donald Trump predicted, but its economy is in serious difficulty as a combination of a massive war-damages bill, inflation, currency devaluation, unemployment and a contraction in oil revenues combine to leave the political elite worrying how hardline they can afford to be with their US negotiators. One estimate circulating in Iran’s media suggests the damage to the economy from the US-Israeli attacks is nine times the value of the Iranian budget last year.

The UN Development Programme has estimated that 4.1 million more Iranians could fall into poverty.

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May 4, 2026 Iran US-Israel war on Iran Middle East and north Africa

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