Iran’s leaders have admitted the war with the United States is taking a heavy economic toll. President Masoud Pezeshkian said foreign trade has dropped by more than a third. US sanctions and a naval blockade are to blame. On Saturday, Tehran signalled it would not back down. It pledged to withstand pressure, pursue diplomacy, and keep control of the Strait of Hormuz.
The government said tackling the economic crisis is now a priority. Goals include curbing inflation, creating jobs, and reducing reliance on the dollar. Pezeshkian told state media that exports and imports had fallen nearly 35 percent. However, he said Iran sold about 90 million barrels of oil during a brief June deal with Washington.
Supreme Leader Ayatollah Mojtaba Khamenei has not been seen publicly since the war began on February 28. He called on the government to address economic hardships. “There is a need to seriously address inflation, unemployment, and price management,” read a written statement. Inflation hit 66 percent last month. Residents in Tehran told Al Jazeera the war has upended daily life. One woman said everything is now too expensive. She had to find a job to support her family. A food business owner said trade has dried up as rents rise.
The government described diplomacy and defence as “two complementary wings” for protecting national interests. It said it would pursue both in a balanced way. Al Jazeera’s correspondent said the government is promoting unity. Pezeshkian has called for dialogue with neighbours. Khamenei has urged domestic unity and social cohesion.
Qatar’s Prime Minister met Iranian leaders in Tehran on Thursday. He stressed the importance of reopening shipping through the strait. Iran’s Foreign Minister called the talks “creative.” Meanwhile, Iran’s military struck a defiant note. The army commander said the “enemy” had tried to destroy Iran’s drone and missile capabilities. But he said they were fired “with utmost intensity until the last moment.” On Friday, the Acting Defence Minister said Iran had “surprises” in store.
Reference
Al Jazeera, “Iran’s leaders acknowledge economic toll of war, pledge diplomacy, defence,” published August 29, 2026. https://www.aljazeera.com/news/2026/8/29/irans-leaders-acknowledge-economic-toll-of-war-pledge-diplomacy-defence