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How Iran's economy suffers from war with Israel

Dan Hirschfeld
July 2, 2025

Since Israel and Iran agreed to a ceasefire, more Iranians are coming back to Teheran. But essential goods are often hard to come by, and the country's economy still struggles with a temporary brain drain.

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The recent Israeli missile strikes on Teheran caused widespread destruction, prompting tens of thousands to flee the city despite a ceasefire now being in place. Iran’s economy is deeply affected, not only by physical damage but also by a sharp population decline in the capital, leaving many factories and offices deserted. Fuel shortages are severe, with long waiting times for gasoline, and supply chains across the country remain disrupted. Internet services have been unstable, crippling businesses that rely heavily on digital infrastructure—including restaurants and cryptocurrency firms. Although some citizens are returning, major uncertainties persist for everyday life and economic recovery.

 

This video summary was created by AI from the original DW script. It was edited by a journalist before publication.