Decline in Household Income and Expenditure

Data on household expenditure and income indicates that the welfare of Iranian households has come under pressure in 2025 following the intensification of sanctions. The real income of urban households has decreased by 6 percent, while their real expenditure has dropped by 3.2 percent. In rural households, real income has fallen by 1.8 percent, although real expenditure has increased by 1 percent. In cities, only the lowest income decile has experienced a 0.5 percent increase in real expenditure, while other deciles have faced reductions in spending. Conversely, the real expenditure of the lowest rural decile has surged by 13.2 percent, which may be linked to transfer payments and voucher systems. The decrease in the Gini coefficient from 0.3870 to 0.3849 does not necessarily indicate an overall improvement in welfare, as economic growth has been nearly zero at the same time. The return of sanctions and the trigger mechanism, political uncertainty, a 12-day war, inflation, and weak investment have been exacerbating factors in this trend. Support payments may temporarily alleviate some of the economic pressure, but they will not replace economic growth, structural reforms, and macroeconomic stability.