World Bank: 74% inflation pushes millions more Iranians below the poverty line

In its new Macro Poverty Outlook report, the World Bank forecast that Iran's poverty rate will reach 38.4% this year and that, with average inflation of 74.2%, more than 2.6 million more Iranians will be pushed below the poverty line. The report was published on Thursday 15 October 2026.

According to the World Bank, Iran's poverty rate had gone from 36% in 2023/24 to 35.1% in 2024/25 and 35.5% in 2025/26, and is now experiencing a fresh jump. Iranians' real per capita income in 2025/26 had returned to roughly the level of 15 years ago.

Inflation and a shrinking economy

The World Bank says average annual inflation will rise from 49.1% last year to 74.2% this year, and that average inflation in the first five months of this Iranian year (March–August 2026) had reached 84.8%. The institution forecasts that Iran's real gross domestic product will shrink by 7.7% this year; economic growth in 2025/26 was negative 0.9%.

In the last three months of the previous Iranian year (December 2025–March 2026), investment fell 12%, exports 13% and imports 28% compared with the year before. In the first five months of this year, non-oil exports have dropped 28% and imports 26%. The budget deficit is rising from 3.2% to 5.8% of gross domestic product.

Unemployment and the labour market

According to the World Bank, the unemployment rate in the first three months of this year rose from 7.3% to 9.1%, and of the 66.1 million Iranians of working age, only about 24.8 million are employed. Youth unemployment has stayed above 20% for two decades.

The World Bank lists among the causes of this collapse the damage to energy infrastructure, industrial facilities and the transport network in the Islamic Republic's war with the United States and Israel, limited foreign-currency reserves, a fragile banking system and the cut-off of access to global markets, and warns that continued conflict will push poverty and food insecurity to an unprecedented level.

The report was published a few days after the International Monetary Fund announced a 7.6% contraction of Iran's economy and Hojjat Abdolmaleki, a former labour minister, said the economy has no problem other than high prices and inflation.

World Bank: this year's 74% inflation pushes more than 2.6 million more Iranians below the poverty line.