Mazlum OzkanThe shopkeepers who closed their stores in central Tehran this week were not making a political statement in the traditional sense.
They were reacting to a simple reality: an economy that no longer works.
The collapse of the rial, combined with persistent inflation, has made everyday business increasingly unviable.
Prices cannot be set, goods cannot be replaced, and routine transactions now carry the risk of loss. When this happens, protest is no longer driven by ideology. It becomes a matter of survival.
This dynamic became visible again on December 28.
As the currency continued to decline and a recession worsened, groups of bazaar merchants stopped activity in several key market areas, including around Jomhouri and Hafez streets, as well as in major commercial centres like Charsou and Alaeddin.
Similar shutdowns were seen in Shoush, where traders in the mobile phone and iron markets completely withdrew from business, arguing that the level of stagnation made ongoing operations economically pointless.
By Monday, gatherings had grown along Jomhouri Street, extending as far as Istanbul Square, signalling not just a single flashpoint but a broader spatial footprint of economic protest.
The immediate trigger was clear. Iran’s currency dropped to new historic lows, with the rial dropping to around 1,445,000 per dollar, compared to roughly 1,370,000 the previous day and about 1,140,000 only a month earlier.
For traders, this volatility does more than erode profit margins. It eliminates the fundamental predictability that markets rely on.
During these gatherings, protesters were heard chanting, “Don’t be afraid, we are all together,” a slogan familiar from earlier protest periods.
Its appearance did not transform the protests into an ideological movement, but it did signal a shift from quiet economic withdrawal to visible collective action as frustration moved from closed shops into public space.
From hardship to dysfunction.
These protests matter because of who is protesting. The bazaar and small traders are not marginal groups dependent on government aid.
They are deeply embedded in Iran’s economic and social fabric. Historically, their response has been a sensitive indicator of systemic stress.
When this segment pulls back from economic activity, it signals that the crisis has shifted from hardship to dysfunction.
Iran’s economic issues are longstanding. Inflation has stayed high for years, wages have steadily lost value, and sanctions have limited growth.
Meanwhile, the government has openly acknowledged that budget constraints prevent wages from keeping up with rising prices. The result is a slow but ongoing decline in living standards.
What is new is the scope of exposure. Economic pressure is no longer limited to specific groups.
Wage earners, shopkeepers, retirees, and informal workers all face the same challenges: currency instability, decreasing purchasing power, and uncertainty about the future.
In such conditions, maintaining public compliance becomes more difficult.
This economic pressure is also linked to earlier nationwide unrest over the past few years.
Earlier protests exposed a significant gap between government authority and public expectations. Although those protests were suppressed, the underlying grievances remained unresolved.
Instead, they have resurfaced through the economy, where falling living standards directly result in daily struggles.
Taken together, Iran’s current unrest cannot be reduced to economics alone, nor to ideology or rights in isolation.
Economic breakdown, social restrictions, and unresolved political grievances have accumulated over time, reinforcing one another and increasing pressure on Iran’s political system.
At the same time, the state maintains significant ability to manage unrest in the short term. Control over policing, the judiciary, and information flows enables authorities to contain protests when needed.
However, containment is not the same as addressing underlying issues. Measures that suppress public expression cannot stabilise the currency, restore purchasing power, or rebuild confidence in everyday economic life.
This narrowing gap leaves fewer options. If economic instability persists, protests are likely to reappear — not as a single nationwide movement, but as recurring, sector-specific disruptions.
Each might be manageable individually. But together, they raise the costs of governance.
Foreign factors
When domestic pressure increases, states often try to redirect frustration outward by highlighting external threats and blaming foreign actors. In Iran’s case, this pattern is significant because economic relief is closely tied to external factors.
External pressure has greatly tightened Iran’s economic limitations.
In late September, the European Union reimposed broad economic and financial sanctions following the reactivation of United Nations Security Council measures related to Iran’s nuclear program.
These actions reinstated restrictions on oil exports, froze assets held by the Iranian central bank and major commercial banks, and further limited access to European financial and trade networks.
Simultaneously, the United States has continued to enforce extensive sanctions targeting Iran’s energy, financial, shipping, and industrial sectors, while discouraging third-party trade through secondary measures.
Together, these overlapping restrictions have reduced foreign-currency inflows, constrained trade and investment, and reduced Iran’s access to international banking channels.
For an economy already weakened by prolonged inflation and stagnation, this cumulative pressure has sharply limited room for adjustment and increased burdens on households and small businesses in Iran.
This framing is already visible in official discourse. Iran’s leadership increasingly presents economic hardship as part of a broader external confrontation, rather than as the result of domestic policy failure.
By describing sanctions, inflation, and declining living standards as elements of an imposed “war,” responsibility is shifted outward, and economic distress is recast as a matter of national resistance rather than governance.
Under these conditions, the leadership faces a strategic dilemma.
One option is external engagement, particularly with the United States, aimed at easing sanctions and reopening economic channels.
Meaningful economic stabilisation depends on access to oil revenues, financial systems, and trade flows, all of which remain constrained under the current sanctions regime.
Without some form of negotiation or de-escalation, internal management alone is unlikely to reverse current trends.
The Iranian authorities are handling the current protests cautiously. Instead of relying only on force, officials have used a softer public tone to prevent protests from spreading.
President Masoud Pezeshkian has publicly recognised protesters’ “legitimate demands” and promised measures to protect purchasing power as the currency continues to decline, indicating an effort to contain unrest through dialogue alongside other methods.
Meanwhile, other state institutions have taken a tougher stance. In a statement released on the second day of protests, the IRGC warned it would oppose “sedition,” “unrest,” or any “security threat,” while the judiciary also indicated potential legal action against those accused of disrupting the economy.
Together, these signals suggest a balanced approach: recognise economic distress to prevent escalation, but maintain the possibility of coercion if protests grow.
Today, Iranians on the streets are raising awareness about core issues, especially the struggling economy.
If economic conditions do not improve, protests could spread to more cities and regions, putting more pressure on the Iranian authorities.
Over time, protests that start over economic concerns may also evolve in tone, shifting from economic issues to broader questions of policy and governance involving the Islamic Republic itself.
