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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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Israeli Ambassador Sounds Alarm on Rising Antisemitism in Germany as Left Party Youth Wing Targets Jews as ‘Traitors’

Pro-Hamas demonstrators marching in Munich, Germany. Photo: Reuters/Alexander Pohl

Israel’s ambassador to Germany, Ron Prosor, has warned of a rising wave of antisemitism in the European country, particularly from left-wing groups, as the youth wing of Germany’s Left Party continues to spread anti-Israel rhetoric and harasses Zionists, labeling them “traitors.”

In a new interview with the German news outlet Berliner Morgenpost, Prosor said that the local Jewish community is living in fear amid an increasingly hostile climate, noting that it is “better not to walk down Sonnenallee in Neukölln wearing a Star of David.”

“In 2025, Jewish men and women fear attending university or riding the subway because they are visibly Jewish. That schools, community centers, and synagogues require round-the-clock police protection is not normal,” the Israeli diplomat said. 

Prosor also highlighted the growing threat of left-leaning antisemitism, saying it is even more dangerous than antisemitism from the political right or from Islamist extremists.

“Left-wing antisemitism, in my view, is even more dangerous because it masks its intentions. It has long operated on the thin line between free speech and incitement,” he said. 

“Across Europe, this is visible on university campuses and theaters. Many present themselves as educated, moral, and progressive — yet the line separating free speech from incitement was crossed long ago,” he continued. “Israel is demonized and delegitimized day after day, and it is Jews everywhere who ultimately suffer the consequences.”

His comments came after Germany’s Left Party youth wing last week passed an anti-Israel resolution labeling the world’s lone Jewish state a “colonial and racist state project,” sparking controversy within both the local Jewish community and the party’s senior leadership.

During the Left Youth’s 18th Federal Congress last weekend, Jewish delegates reported being harassed by fellow party members — branded “traitors” and even warned of an internal “purge.” 

According to local media reports, several participants left early after colleagues allegedly threatened to show up at their hotel rooms at night.

Now, the youth group is set to vote next week on a motion falsely accusing Israel of committing genocide in Gaza, as well as another measure calling for support of the boycott, divestment, and sanctions (BDS) movement, which seeks to isolate the Jewish state internationally as a step toward its eventual elimination.

Earlier this year, the Berlin Office for the Protection of the Constitution — the agency responsible for monitoring extremist groups and reporting to the German Interior Ministry — designated BDS as a “proven extremist endeavor hostile to the constitution.” The agency also described the campaign’s “anti-constitutional ideology, which denies Israel’s right to exist.” That followed Germany’s federal domestic intelligence agency, the Federal Office for the Protection of the Constitution (BfV), last year classifying BDS as a “suspected extremist case” with links to “secular Palestinian extremism.”

Prosor in his interview condemned the Left Youth’s latest resolution and the harassment of Jewish members, saying “the red line has been crossed.”

“The youth wing of the Left Party is showing the true face of left-wing antisemitism, which would otherwise remain well hidden,” the Israeli diplomat wrote in a post on X. 

“By justifying terror, turning a blind eye to antisemitism, and denying Israel’s right to exist, the Left Party has abandoned its moral compass and integrity. All that remains is extremism, radical ideology, and violence,” Prosor continued. 

Amid increasing political pressure to clearly distance itself from the youth wing, senior leaders of Germany’s Left Party are now facing growing scrutiny. 

While the youth group is technically independent, it relies financially on the main party.

After meeting Wednesday night, the party’s executive committee issued a statement saying there was “broad agreement that the approved motion is inconsistent with the positions of the Left Party.”

“Antisemitism and the downplaying of antisemitic positions contradict the core values of the Left,” the statement read.

“Intimidation, pressure, and exclusion have no place in a left-wing youth organization, and even less in the political culture we uphold as the Left,” it continued. 

However, intimidation of dissenting voices and anti-Israel rhetoric are not new within the Left Party, following a pattern of previous antisemitic incidents within the organization.

For example, Berlin’s former Culture Senator, Klaus Lederer, and other prominent members left the organization last year following an antisemitic scandal at a party conference in Berlin.

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Progressive Jewish groups say ADL’s ‘Mamdani Monitor’ is ‘Islamophobic and racist’

A coalition of progressive Jewish organizations is condemning the Anti-Defamation League for what it calls “Islamophobic and racist” attacks on New York City mayor-elect Zohran Mamdani.

In a statement released Tuesday, the groups criticized the ADL’s creation of a “Mamdani Monitor” to track policies and personnel appointments that the ADL views as threatening Jewish security.

The signatories — including New York Jewish Agenda, Bend the Arc: Jewish Action, IfNotNow, J Street NYC, Jews for Racial & Economic Justice and T’ruah: The Rabbinic Call for Human Rights — said the project “undermines the shared fight against antisemitism and Islamophobia in New York City.”

“Regardless of how we voted or what our views are on Israel and Palestine,” the letter reads, “we stand firmly against the Islamophobic and racist attacks from the institutions claiming to represent our communities.”

The groups said they intend to work with Mamdani, a Muslim and outspoken critic of Israel, in his pledge to combat antisemitism and all forms of hate. “Together, we can help build a city grounded in justice, dignity, and care for every New Yorker,” the statement said.

The ADL statement announcing the Mamdani Monitor made no reference to Islam. Responding to critics of the Mamdani Monitor in a video last week, the group’s CEO, Jonathan Greenblatt, said of Mamdani that “fierce animosity toward the Jewish state has characterized his entire time in public life” and that “he surrounded himself with people who are notorious for their antisemitism.”

Greenblatt said the ADL has launched an antisemitism tip line for Jewish New Yorkers, and will expand research of policies by and appointees to Mamdani’s administration. “If the new administration does great things to keep Jewish New Yorkers safe and to make them feel welcome, then people should know about it,” Greenblatt said in the video. “And if the new administration takes steps that endanger Jewish New Yorkers make them feel unwelcome, then people should know about it too. That’s it. It’s pretty simple.”

At least one of the signers of the statement said the ADL is applying a double standard to Mamdani, and that the group hasn’t created a similar monitor to track antisemitic activity within the Trump administration. “We reject false accusations of antisemitism against Black, brown, and Muslim progressive champions who are fighting for a country where all of us can thrive,” Bend the Arc said in a statement on its website.

The letter provides further evidence of a split along ideological and strategic lines among Jewish organizations over how to interact with Mamdani. For groups like the ADL and the UJA-Federation of New York, for whom staunch support of Israel is a core tenet, Mamdani’s support for the boycott movement against Israel, along with his harsh criticism of the country at a time of rising antisemitism, represents a threat to Jewish New Yorkers.

Progressive groups are eager to work with Mamdani on domestic issues like affordability, a pillar of his campaign. Some of the groups who signed Tuesday’s statement, including New York Jewish Agenda and T’ruah, support Israel while advocating for peace and democracy in ways frequently critical of the Israeli government. The day after Mamdani’s victory, NYJA released a statement saying that it looked forward “to engaging the new administration on shared priorities in the months to come, including combating antisemitism and other forms of hate, tackling the affordability crisis, and ensuring that all New Yorkers feel safe in our great city.”

About a third of Jews who voted in the election supported Mamdani.


The post Progressive Jewish groups say ADL’s ‘Mamdani Monitor’ is ‘Islamophobic and racist’ appeared first on Jewish Telegraphic Agency.

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Iran’s Water Crisis Worsens as President Warns Tehran May Need to Be Evacuated

Iranian President Masoud Pezeshkian speaks during a meeting in Ilam, Iran, June 12, 2025. Photo: Iran’s Presidential website/WANA (West Asia News Agency)/Handout via REUTERS

Iran has endured an extreme drought in recent months, depleting the country’s reservoirs and leading President Masoud Pezeshkian to warn that the capital may even need to be evacuated.

“If rationing doesn’t work, we may have to evacuate Tehran,” Pezeshkian said last week, adding that the Iranian regime will start restricting water supplies in the city next month if there isn’t more rain.

According to Abbasali Keykhaei of the Iranian Water Resources Management Company, 19 major dams comprising 10 percent of the country’s reservoirs have run dry. In Tehran — a city with 10 million people in the city itself and 18 million in the metropolitan area — five dams that provide drinking water have hit “critical” levels, with one at below 8 percent capacity.

Hossein Esmaeilian, managing director of the Water and Wastewater Company in Mashad, the country’s second largest city with four million residents, told state media that reserves have fallen below 3 percent and that “the current situation shows that managing water use is no longer merely a recommendation – it has become a necessity.”

Esmaeilian added that “only 3 percent of the combined capacity of Mashhad’s four water-supplying dams — Torogh, Kardeh, Doosti, and Ardak — remains. Apart from Doosti Dam, the other three are out of operation.”

Iranian Energy Minister Abbas Ali Abadi has stated that “some nights we might decrease the water flow to zero.” He said on Iranian state television on Saturday that this was needed “so that reservoirs can refill.”

“If people can reduce consumption by 20 percent, it seems possible to manage the situation without rationing or cutting off water,” Esmaeilian urged Iranians, suggesting that those consuming the most would see cuts to their water supply first.

However, environmental researcher Azam Bahrami told German media outlet DW that “reduced consumption among the population is nowhere near enough to overcome this crisis.”

“One look at the water consumption pyramid shows that the agriculture sector consumes about 80-90 percent, the biggest share,” Bahrami continued. “As long as other sectors are positioned as priority … the water saving measures will not be very successful.”

The BBC reported that Iranian weather officials do not expect rain in the next 10 days. Mohammad-Ali Moallem, who manages the Karaj Dam, said that there was a 92 percent decrease in rain compared to last year.

“We have only 8 percent water in our reservoir — and most of it is unusable and considered ‘dead water,’” he added.

Stuttgart University researcher Mohammad Javad Tourian told DW about the rate of water loss Iran has seen in recent years.

“Iran loses a volume the size of Lake Constance almost every three years,” Tourian said. “In total, some 370 cubic kilometers have disappeared over the last 23 years. This means the problem is very serious.”

The question of a potential evacuation of Tehran remains unresolved. Former Tehran Mayor Gholamhossein Karbaschi stated that fleeing the city due to the drought “makes no sense at all.”

Tourian identified actions that Iran could take to provide “rapid relief,” saying that prioritizing drinking water in key cities and the “temporary diverting of less critical usage” could be effective as quick, short-term steps.

However, actions to create a sustainable solution to the water crisis remain elusive.

While the Islamic regime in Iran struggles to quench the thirst of the Iranian people, its military reportedly remains stocked in its missiles targeting Israel.

“Our missile power today far surpasses that of the 12-day war,” Iranian Foreign Minister Abbas Araghchi said last week, referring to the regime’s brief conflict with Israel in June. “The enemy in the recent 12-day war failed to achieve all its objectives and was defeated.”

Brig. Gen. Aziz Nasirzadeh likewise boasted of Iranian military might, saying on Monday that the country’s “defense production has improved both in quantity and quality compared to before the 12-day Israeli-imposed war in June.”

Last week, a US official confirmed that Iran had initiated a plan to assassinate Ambassador Einat Kranz Neiger, Israel’s emissary in Mexico City.

“The plot was contained and does not pose a current threat,” the official told i24 News. “This is just the latest in a long history of Iran’s global lethal targeting of diplomats, journalists, dissidents, and anyone who disagrees with them, something that should deeply worry every country where there is an Iranian presence.”

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