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Iran Risks Severe Economic Downturn, Unrest as Renewed UN Sanctions Bite

People walk near a mural of Iran’s Supreme Leader, Ayatollah Ali Khamenei, amid the Iran-Israel conflict, in Tehran, Iran, June 23, 2025. Photo: Majid Asgaripour/WANA (West Asia News Agency) via REUTERS

Iran‘s economy is at risk of simultaneous hyperinflation and severe recession, officials and analysts say, as clerical rulers scramble to preserve stability with limited room to maneuver after a snapback of UN sanctions.

They followed a breakdown in talks to curb Iran‘s disputed nuclear activity and its ballistic missile program. Diplomacy to resolve the deadlock remains possible, both sides say, though Iranian Supreme Leader Ayatollah Ali Khamenei has rebuffed US President Donald Trump’s offer to forge a new deal.

Three senior Iranian officials, speaking on condition of anonymity, said Tehran believes the US, its Western allies, and Israel are intensifying sanctions to fuel unrest in Iran and jeopardize the very existence of the Islamic Republic.

Since the reimposition of UN sanctions on Sept. 28, multiple high-level meetings have been held in Tehran on how to avert economic collapse, circumvent sanctions, and manage simmering public anger, the officials told Reuters.

Deepening economic disparities between ordinary Iranians and a privileged clerical and security elite, economic mismanagement, galloping inflation, and state corruption – reported even by state media – have fanned discontent.

“The establishment knows protests are inevitable, it is only a matter of time … The problem is growing, while our options are shrinking,” said one of the officials.

Iran‘s leadership is leaning heavily on its “resistance economy” — a strategy of self-sufficiency and closer trade with China, Russia, and some regional states. Moscow and Beijing back Iran’s right to peaceful nuclear energy and condemned US and Israeli strikes on three Iranian nuclear sites in June.

But analysts warn that such workarounds may not be enough to shield the sprawling country of 92 million people from the renewed economic blow.

“The impact of the UN sanctions will be severe and multifaceted, deepening the country’s longstanding structural and financial vulnerabilities,” said Umud Shokri, an energy strategist and senior visiting fellow at George Mason University near Washington.

“The government is struggling to maintain economic stability as sanctions disrupt banking networks, restrict trade and constrain oil exports – the country’s main revenue source, resulting in escalating social and economic pressure.”

OIL LIFELINE UNDER THREAT AS UN SANCTIONS RETURN

Iran has avoided wholesale economic meltdown since 2018 when, during his first term, Trump withdrew the US from Tehran’s 2015 nuclear deal with six world powers and reimposed US sanctions.

But the revival of wider UN sanctions is inflicting shocks that will stymie economic growth, accelerate inflation, and the collapse of the rial currency, pushing the economy toward a recessionary spiral, one of the Iranian officials said.

Iran’s economy contracted sharply after 2018 due to renewed US sanctions. It rebounded in 2020 to grow modestly at times, largely due to oil trade with China.

But the World Bank this month forecast a shrinkage of 1.7 percent in 2025 and 2.8 percent in 2026 – sharply down from the 0.7 percent growth it had projected in April for next year.

While Tehran still relies heavily on oil exports to China – its biggest customer and one of the few countries still doing business with it despite Trump’s “maximum pressure” policy, doubts reign over the sustainability of that trade.

Although sold at a discount, crude remains a vital source of income for Tehran, with oil and petrochemicals making up about a quarter of GDP in 2024.

Despite public assurances that oil sales to China will continue, one Iranian official said the reimposed global sanctions could stifle that flow.

Shokri said that if China seeks to ease tensions with the Trump administration, it may tighten its stance on Iranian oil — demanding steeper discounts or cutting imports altogether.

For Tehran, the costs could be devastating. Every dollar shaved off the price of oil translates into roughly half a billion dollars in lost annual revenue, he said.

The rial has shriveled to 1,115,000 per dollar from 920,000 in August, stoking inflation to at least 40 percent and gutting purchasing power. Persistent currency depreciation and trade sanctions are driving up prices and sapping investor confidence.

HARDSHIP SPREADS, PUBLIC ANGER SIMMERS

Few Iranians can escape the attendant hardships. A sense of desperation is rippling through society, affecting urban professionals, bazaar traders and rural farmers alike.

“How much more pressure are we supposed to endure? Until when? I’m a government employee, and I earn just 34 million tomans (around $300) a month,” said Alireza, 43, speaking by phone from the capital Tehran. Like others, he asked not to be further identified for fear of retribution from authorities.

“My wife is jobless. The import-export company she worked for shut down last month. With just my salary and two kids, we’re struggling to even pay rent and school expenses. What are we supposed to do?” ”

Iran’s official inflation rate is around 40 percent though some estimates exceed 50 percent. Official data in September showed prices for 10 staple goods – including meat, rice and chicken – rose 51 percent in one year. Housing and utility costs have also surged. Beef now costs $12 a kilo – too expensive for many families.

The clerical elite increasingly worry that mounting public distress could reignite mass protests that have erupted periodically since 2017 among lower- and middle-income Iranians, the second Iranian official said.

Many Iranians like Sima, 32, a factory worker in the central city of Shiraz worn down by years of economic strain, worry that the expanded sanctions will push them past the breaking point.

“Now they say we’re facing new sanctions again, but we’re already struggling to provide for our three children. Prices go up every single day and we can’t even afford to buy meat for them once a month,” said Sima.

Many business owners fear deeper international isolation and further Israeli airstrikes if diplomacy fails to resolve the nuclear standoff.

“With the constant fear of a possible attack and not knowing whether I’ll even be able to export this month or next, how am I supposed to keep my business running?” said Mehdi, who ships fruit to neighboring countries.

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Netanyahu Coalition Pushes Contentious Oct. 7 Attack Probe, Families Call for Justice

Israeli Prime Minister Benjamin Netanyahu participates in the state memorial ceremony for the fallen of the Iron Swords War on Mount Herzl, Jerusalem on Oct. 16, 2025. Photo: Alex Kolomoisky/POOL/Pool via REUTERS

Israel‘s parliament gave the initial go-ahead on Wednesday for a government-empowered inquiry into the surprise October 7, 2023 attack by Hamas terrorists on southern Israel rather than the expected independent investigation demanded by families of the victims.

Prime Minister Benjamin Netanyahu has resisted calls to establish a state commission to investigate Israel‘s failures in the run-up to its deadliest day and has taken no responsibility for the attack that sparked the two-year Gaza war.

His ruling coalition voted on Wednesday to advance a bill which grants parliament members the authority to pick panel members for an inquiry and gives Netanyahu’s cabinet the power to set its mandate.

Critics say the move circumvents Israel‘s 1968 Commissions of Inquiry Law, under which the president of the Supreme Court appoints an independent panel to investigate major state failures such as those which preceded the 1973 Yom Kippur war.

Survivors and relatives of those hurt in the Hamas attack have launched a campaign against the proposed probe, saying only a state commission can bring those accountable to justice.

“This is a day of disaster for us all,” said Eyal Eshel, who lost his daughter when Hamas militants overran the army base where she served. “Justice must be done and justice will be done,” he said at the Knesset, before the vote.

Surveys have shown wide public support for the establishment of a state commission into the country’s biggest security lapse in decades.

Netanyahu said on Monday that a panel appointed in line with the new bill, by elected officials from both the opposition and the coalition, would be independent and win broad public trust.

But Israel‘s opposition has already said it will not cooperate with what it describes as an attempt by Netanyahu’s coalition to cover up the truth rather than reveal it, arguing that the investigation would ultimately be controlled by Netanyahu and his coalition.

The new bill says that if the politicians fail to agree on the panel, its make-up will be decided by the head of parliament, who is allied with Netanyahu and is a member of his Likud party.

Jon Polin, whose son Hersh Goldberg-Polin was taken hostage and found slain by his captors with five other hostages in a Hamas tunnel in August 2024, said only a trusted commission could restore security and unite a nation still traumatized.

“I support a state commission, not to see anyone punished and not because it will bring back my only son, no. I support a state commission so that nothing like what happened to my son, can ever happen to your son, or your daughter, or your parents,” Polin said on Sunday at a news conference with other families.

Hersh Goldberg-Polin was among dozens of hostages taken in the 2023 attack from the site of the Nova music festival.

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Christmas Celebrations Muted at Bondi as Australians Grieve After Deadly Shooting

People attend the ‘Light Over Darkness’ vigil honoring victims and survivors of a deadly mass shooting during a Jewish Hanukkah celebration at Bondi Beach on Dec. 14, in Sydney, Australia, Dec. 21, 2025. Photo: REUTERS/Hollie Adams

Christmas celebrations were muted at Sydney’s famed Bondi Beach on Thursday in the aftermath of a terror attack that killed 15 people there more than a week ago, as the community continued to grapple with the country’s deadliest mass shooting in nearly three decades.

Police patrolled across the beachfront in Bondi, a traditional Christmas destination, as hundreds of people, many wearing Santa hats, gathered on the sands.

“I think it’s tragic, and I think everybody respects and is very sad for what happened, and I think people here are out on the beach, because it’s like a celebration but everybody has got it in their memories and everybody is respectful of what happened,” British tourist Mark Conroy told Reuters.

“Everyone is feeling for the family and friends who are going through the worst possible thing you could imagine.”

The gun attack on December 14 at a Jewish Hanukkah celebration has prompted calls for stricter gun laws and tougher action against antisemitism, while public gathering rules in Sydney have been tightened under new laws passed on Wednesday.

Beachgoers were seen taking photos next to a Christmas tree while some posed with lifeguards, although windy weather conditions appeared to thin crowds.

“It’s not the best conditions for Christmas Day today, it’s a bit choppy. … so not ideal, but people are still here,” Surf Life Saving Patrol Captain Thomas Hough said.

Flags flew at half mast outside the heritage-listed Bondi Pavilion building near the site of the attack, which police say was allegedly carried out by a father and son, inspired by the militant group Islamic State.

In Melbourne, a car with a “Happy Chanukah!” sign was set alight on Christmas Day in the city’s southeast, with no injuries reported, Australian media reported.

Prime Minister Anthony Albanese, facing mounting criticism from opponents who argue his government has not done enough to curb a rise in antisemitism, called the firebombing of the car “just beyond comprehension.”

“What sort of evil ideology and thoughts at a time like this would motivate someone?,” Albanese told reporters on Thursday.

Since the start of Israel’s war in Gaza in October 2023, there have been attacks against synagogues, Jewish buildings and cars in Australia.

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‘Poles Watching Can Be Proud’: Director Defends Holocaust Film 10-Years in the Making Sparking Backlash in Poland

Pelagia Radecka, featured in “Among Neighbors.” Photo: Courtesy of 8 Above

A documentary that addresses the historic and well-documented murder of hundreds of Holocaust survivors by local Poles in the aftermath of World War II has stirred political controversy within the Eastern European country, but its director told The Algemeiner the film mentions a lot that Poles can be proud of.

“There are stories within the film that Poles can look at and be proud of how those individuals acted during and since World War II,” said Yoav Potash, the Jewish award-winning writer, producer and director of  “Among Neighbors.”

“And there are also stories that may make people feel like it’s a shame, that some Poles behaved the way they did,” he added. “And that’s an appropriate and mature response. To look at the history of your own nation and say, ‘Wow, some of us really failed in our decency and humanity.’”

Potash’s documentary “Among Neighbors” focuses on a handful of particular stories in the small town of Gniewoszów, in north-central Poland, where Jews were murdered by their Polish Catholic neighbors months after the war ended – neighbors whom they once lived peacefully with for centuries before World War II. The film uses hand-drawn animation as well as first-hand testimonies and interviews with Holocaust survivors, locals and World War II experts in Poland to tell the stories of Jews who were liberated at the end of the Holocaust only to be then murdered by local Poles when returning home.

At the heart of the film is Yaacov Goldstein, one of the last living Holocaust survivors from Gniewoszów, and Pelagia Radecka, a local Polish eyewitness who saw Jews murdered in Gniewoszów by her Polish neighbors, six months after the Nazis were defeated. Radecka has fond memories of her Jewish neighbors and at the age of 85, she remains scarred by their murders, and efforts by the murderers and politicians to silence her. She holds on to the hope that she will find the Jewish boy who is the surviving child of two of the victims murdered by local Poles. Goldstein talks in the film about his wartime experiences and the brutal conditions he was forced to endure to survive the Holocaust, which include hiding for two years in a storage compartment so small he could not straighten his legs and escaping execution by a Nazi firing squad because of a miracle.”

Several elders from Gniewoszów were interviewed for “Among Neighbors” and all but two have since died. The film features their final testimony.

It took Potash 10 years to make “Among Neighbors,” the filmmaker from California told The Algemeiner. He said he was basically “flying under the radar” filming the project in Poland when the country passed a law in 2018 criminalizing any claims that the Polish nation or state was complicit in the Holocaust. The controversial legislation, making it illegal to accuse Poland of colluding with the Nazis, was championed by the ruling nationalist Law and Justice party. The country has a long-standing history of promoting the narrative that Poles were only victims in Nazi-occupied Poland. In November, Polish Member of Parliament Grzegorz Braun declared “Poland is for the Poles” and that Jews “have their own countries” during a speech outside the site of the former Auschwitz concentration camp.

“Among Neighbors” made its world premiere at the Warsaw Jewish Film Festival last year, where it won the festival’s Special Award. Poland’s national public broadcaster TVP aired the film in November and its television premiere garnered well over 100,000 viewers, according to Potash. “Among Neighbors” is still available for viewers in Poland on TVP’s streaming platform.

But on Nov. 16, six days after “Among Neighbors” aired and began streaming in Poland, senior Polish officials and right-wing media outlets condemned both the film and TVP. Agnieszka Jędrzak, undersecretary to Polish President Karol Nawrocki, called the film “anti-Polish historical manipulation” in a post on X. The National Broadcasting Council of Poland (KRRiT) has since launched an investigation into TVP, which is ongoing. So far TVP is standing by its broadcast of the film and has not removed “Among Neighbors” from its streaming platform.

Speaking to The Algemeiner, Potash insisted that “Among Neighbors” is “not an anti-Polish film.”

“I think there is plenty in the film for Poles to look at and be proud of,” he explained. “And that would include the story of the man who forged papers for Jews in Gniewoszów and saved the lives of at least nine people by giving them false papers that could make them appear to be not Jewish, so they can flee Poland and get to safety. In addition to including this story in the film, we contacted Yad Vashem and told them we had someone to add to the Righteous Among the Nations. And we made that happen. In 2018, he was inducted posthumously. We felt like this individual deserves that special honor.”

Potash added that Polish viewers can also be proud of Radecka “because she showed a lot of courage overcoming overwhelming pressure from the murderers, and later the politicians, who tried to silence her.” He criticized “extreme nationalists” in Poland who are “only concerned with the fact that this film also pokes some very large holes in a narrow and oversimplified view that some in Poland have of themselves and their national identity, especially how it relates to World War II.”

The filmmaker said he was not the least bit surprised about the political backlash that the film has received in Poland, considering the “very divided and politically charged atmosphere in Poland, especially around their World War II history.”

“There is a popular national myth in Poland that during World War II, Poles were only heroes or victims. Nothing else,” he said. “I think for many years, children and adults in Poland have largely been taught and fed this myth … Even today, roughly half the country is still clinging to a fantasy version of history that denies the extent to which Poles were complicit in either pointing out to Nazis where Jews were hiding or doing much worse, such as is revealed in my film, which is that some Poles continued to kill Jews even after the war was over, the Nazis were defeated and gone.”

“The reality is that when World War II was over, Holocaust survivors came back to their shtetls [a small Jewish town or village] seeking out others who may have survived, wondering, ‘Can we regroup here? Is it even possible to restart our lives in the towns that we loved and where we’ve lived our entire lives?’ And these murders that took place across Poland told them, ‘Absolutely not. You are not welcome. You cannot restart, you cannot continue life in the shtetl.’”

“Among Neighbors” is currently playing in select US theaters and film festivals. It won the Audience Award at the San Francisco Independent Film Festival, three awards from the Teaneck International Film Festival, and the Jewish Film Institute’s Envision Award. Still, Potash told The Algemeiner that the film has received negative reactions from some streaming platforms and major film festivals. He shared a story of a major streamer that told him the documentary was not “broad enough” for their platform.

“To be not ‘broad enough’ sounds like a nicer way of saying ‘too Jewish,’” Potash said. “I worked really hard to try to make this film as universal as possible. And I think the themes of can we confront out history honestly, even the parts that are difficult, that applies across the board to just about every country and society in the world. Unfortunately, releasing this film during this post-Oct. 7 [2023] environment that been really, really challenging. A lot of major festivals and streamers don’t want to get near content that’s seen as ‘too Jewish.’”

While TVP remains under investigation by the National Broadcasting Council of Poland for airing “Among Neighbors,” Potash encourages Poles to see the documentary for themselves and make their own judgements about the film.

“Don’t believe all the out of context ranting about the film that’s coming from political extremists and historical revisionists in Poland,” he explained. “I think it’s important for people to see this film because it gets into the real complexities of how history actually unfolded. It resists the simple narrative of: ‘We were heroes, and these were the villains, and these were the victims.’ It wasn’t always so black and white; so simple. The real stories that came out of this situation were quite complex. And those simplistic narratives don’t always fit.”

The USC Shoah Foundation — founded in 1994 by Steven Spielberg with the goal of recording, preserving, and sharing testimonies related to the Holocaust — has partnered with the JFCS Holocaust Center to create an educational curriculum so “Among Neighbors” can be used in classrooms as part of Holocaust education. A portion of revenue generated by the film benefits the JFCS Holocaust Center.

Watch the trailer for “Among Neighbors” below.

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