A thaw with the US won't fill Iranian tables overnight

Iranian authorities now face growing public expectations that any diplomatic opening will translate into tangible economic gains. Many hope that sanctions relief or the release of frozen assets will ease financial pressures and improve living standards.

Economists, however, warn that even if restrictions are lifted, the benefits are unlikely to be felt immediately.

The uncertainty has been compounded by the fact that many of the memorandum's economic provisions remain unclear, including the timing and scope of any sanctions relief or asset releases.

According to a recent survey cited by Deputy Interior Minister Mohammad Bathaei during a press conference this week, 60% of respondents said they could no longer tolerate additional economic pressure.

Economist Khalil Janami wrote in Khabar Online that “the real achievement of diplomacy only becomes meaningful when people feel its results in their livelihoods, employment opportunities, and quality of life.”

Economy Minister Ali Madanizadeh also cautioned Thursday that an agreement with Washington would not return Iran's economy to normal conditions overnight.

Discussing government finances, he said Iran had already faced a budget deficit of several hundred trillion tomans before the war and that conditions have since worsened. He said the government also borrowed 100 trillion tomans from the Central Bank after the conflict, with the inflationary consequences likely to become visible in the coming months.

Analysts say Iran's economic challenges—including high inflation, unemployment and years of stagnation—are structural problems that cannot be resolved quickly through a political agreement.

Working people under pressure

Workers have been among the hardest hit by Iran's prolonged economic crisis. In recent years, wage increases have consistently failed to keep pace with inflation, steadily eroding purchasing power.

The Iranian Labour News Agency (ILNA) recently reported that a worker's daily wage after eight hours of work is not enough to buy even 250 grams of red meat. The agency said many workers struggle to cover basic living expenses even when taking on overtime shifts.

Citizen reports received by Iran International indicate that layoffs and delays in wage payments continue in some sectors. Some people approved for unemployment benefits earlier this year say they have yet to receive any payments.

The middle class has also seen its financial position deteriorate. Families that once had the ability to save, buy homes and plan for the future have increasingly been forced to cut both essential and discretionary spending.

Some economists describe the trend as the gradual erosion of the middle class.

Eroding living standards

In May, Iranian families paid nearly 84% more than a year earlier for the same basket of goods and services.

For many households, food prices remain the most immediate concern.

Official figures from the Statistical Center of Iran show that year-on-year inflation for food and beverages reached 130% in the month ending in May. Annual food inflation also climbed to around 83%, up from roughly 75% in April.

Economist Morteza Afghah told Fararu that families are increasingly under pressure as inflation outpaces wage growth.

“Food has not been completely removed from household shopping baskets,” he said, “but nutritious and valuable items are being replaced with low-quality foods that simply fill the stomach.”

He added that lower-income groups, already spending nearly all of their income on essential goods, would face even greater hardship as inflation intensified.

Skepticism and hope online

The prospect of improved relations with Washington has prompted a wave of reactions on social media, where users expressed a mix of optimism and doubt.

Iranian journalist Azadeh Mokhtari wrote on X: “The military war between Iran and the United States has, at least for now, come to an end. But real victory will be felt when the war against inflation begins and ends with its defeat.”

She added: “People feel relieved when the sound of explosions stops, but they become happy when rising prices end. Today is the time to defeat inflation and control prices.”

Another user, Amir, welcomed the memorandum and expressed hope it would lead to a formal agreement, while lamenting the economic damage, job losses and destruction caused by the conflict.

Others remained unconvinced.

One user wrote: “Based on my limited experience, I highly doubt that signing an agreement will have even a small effect on people's lives. Rest assured, this agreement will not fill people's tables either.”

Hardline opposition in Iran to the Islamabad MoU increasingly resembles the reaction of ultraconservatives to the 2015 nuclear deal.

The parallels now extend beyond the critics themselves: a message attributed to Supreme Leader Mojtaba Khamenei on Thursday offered cautious backing for the agreement while signaling reservations about its terms, recalling the balancing act performed by his father during the JCPOA debate.

When then–Foreign Minister Javad Zarif returned to Tehran after the JCPOA was announced in Vienna in July 2015, vigilante groups gathered at the airport, threatening to lynch him on arrival.

Eleven years later, similar militant factions in Tehran and Mashhad have been heard chanting death threats against chief negotiator Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi, denouncing them as “traitors” and “mercenaries of the United States.”

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The parallels now extend beyond the critics themselves: a message attributed to Supreme Leader Mojtaba Khamenei on Thursday offered cautious backing for the agreement while signaling reservations about its terms, recalling the balancing act performed by his father during the JCPOA debate.

When then–Foreign Minister Javad Zarif returned to Tehran after the JCPOA was announced in Vienna in July 2015, vigilante groups gathered at the airport, threatening to lynch him on arrival.

Eleven years later, similar militant factions in Tehran and Mashhad have been heard chanting death threats against chief negotiator Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi, denouncing them as “traitors” and “mercenaries of the United States.”

The comparison is striking despite the very different nature of the two agreements.

The JCPOA was a comprehensive, multilateral non-proliferation accord negotiated in peacetime. The June 2026 MoU, by contrast, is a rapid bilateral framework designed to halt a destructive war, reopen the Strait of Hormuz and create a 60-day window for broader negotiations on Iran’s nuclear program.

In 2015, Supreme Leader Ali Khamenei ultimately shielded Zarif and his team, praising their “services to the nation and Islam” despite earlier criticism. A decade later, Mojtaba Khamenei appears to be performing a more cautious version of the same role.

In doing so, he echoed a familiar formula: approving diplomacy while distancing himself from its potential costs. He said he had authorized the agreement despite reservations in principle, after receiving assurances that Iran’s rights and the interests of the “Resistance Front” would be protected.

Hardline outlets and figures have recycled much of the same language deployed against the JCPOA, warning of “capitulation,” “retreat” and repeated “betrayals,” while more pragmatic and reformist-leaning voices defend the MoU as a system-approved effort to secure economic relief and end the war.

Notably, some of the loudest opponents of the Islamabad MoU, including ultraconservative MP Mahmoud Nabavian and Kayhan editor Hossein Shariatmadari, played a similar role in 2015.

Ultraconservative factions continue to accuse negotiators of falling into a Western trap. Elements within the Islamic Revolutionary Guard Corps (IRGC) view provisions requiring a freeze on enrichment levels and the return of IAEA inspectors to damaged facilities as an unacceptable concession.

The parallels are not exact, but the political script has proved remarkably durable. In both periods, opponents of diplomacy have framed engagement with Washington as a threat to national sovereignty and security.

The JCPOA sought to resolve a long-running nuclear dispute through a detailed and legally complex framework. The Islamabad MoU is a temporary political arrangement intended to stop active hostilities and create space for further negotiations.

Yet some critics on both sides have approached it through the same lens that shaped the debate over the JCPOA.

Similar concerns surfaced at the ongoing G7 summit in France, where several European leaders urged President Trump to adopt a tougher stance toward Tehran and ensure that any future agreement contains sufficient safeguards against the potential weaponization of Iran’s nuclear activities.

Trump may feel free to dismiss such concerns, believing European governments have offered limited support for his campaign against Tehran. Ghalibaf, by contrast, is clearly attempting to persuade domestic hardliners to accept the agreement.

Addressing the Chamber of Commerce on Wednesday, he declared: “All of us must take over the trench that was held by the battlefield warriors, stand firm, lift the people out from under economic pressures, and build the country with power.”

Mojtaba Khamenei’s statement appeared designed to contain opposition from within the conservative camp. While emphasizing that he had approved the agreement only after receiving specific assurances from Iranian officials, he portrayed the decision as a conditional endorsement rather than a strategic shift, signaling to critics that support for the memorandum should not be mistaken for acceptance of broader concessions to Washington.

By invoking the language of wartime sacrifice while defending a diplomatic agreement, Ghalibaf appeared to be making a familiar argument: that negotiation, however unpopular among hardliners, may sometimes be necessary to preserve the very system they seek to defend.

State-controlled media initially struck an upbeat tone, highlighting the positive reaction in Iran’s foreign-exchange and gold markets. It also amplified reports about the repatriation of frozen assets and a $300 billion reconstruction package.

But the market rally was short-lived, and both stories about incoming cash were quickly dismissed as fake news and publicly refuted by Trump at the G7 summit in France.

Across Tehran’s media on Tuesday morning, coverage reflected a mix of cautious optimism and skepticism.

The debate is unfolding even as the memorandum itself remains unpublished and some of its key provisions unclear.

The agreement is expected to be formally signed on Friday, but it faces critics in both Tehran and Washington, where opponents have questioned everything from sanctions relief to the handling of Iran’s nuclear program.

The divide was especially clear in two interviews: one with economist Heydar Mostakhdemin-Hosseini in Jahan-e Sanat newspaper, and another with macroeconomist Hadi Haghshenas on the Khabar Online website.

Mostakhdemin-Hosseini’s core message was a warning: while a political breakthrough may calm market psychology and reduce short-term inflationary expectations, it will not resolve Iran’s entrenched structural problems, including chronic budget deficits, excessive money creation and a dysfunctional banking system.

He stressed that political calm can temporarily stabilize markets by reducing panic buying and war-related anxiety, but it cannot cure long-term inflation.

On the dangers of crisis financing, he said: “The greatest danger in wartime conditions is financing the costs of war through printing money… Almost all countries that experienced hyperinflation during periods of conflict repeated this exact mistake.”

He also warned that “capital flees from instability,” arguing that legal stability, respect for property rights, anti-corruption measures and reduced political risk must be top priorities.

“In times of economic crisis, the public’s psychological trust in the government’s economic stewardship is a far more powerful tool for market stabilization than physical gold or foreign currency reserves,” he added.

Offering a starkly different assessment, Haghshenas presented an optimistic outlook for Iran’s economy following what he described as a two-stage agreement with the United States.

He predicted that the post-war period could mirror the economic rebounds seen after the 1988 ceasefire with Iraq under UN Resolution 598 and the 2015 nuclear deal, potentially delivering single-digit inflation and double-digit growth.

He argued that a final deal could reduce inflation by stabilizing the foreign-exchange market and unlocking frozen assets to absorb excess liquidity.

Psychological relief and a decline in inflation would emerge during the current Iranian year ending in March 2027, he said, while more substantial macroeconomic gains, including double-digit growth, would likely materialize in the following year ending in March 2028.

“When blocked resources enter the economy, they will collect a portion of the existing liquidity,” he added. “Therefore, the potential agreement will lead to a reduction in the inflation rate from two directions.”

Whether that optimism proves justified remains uncertain. Even if a broader agreement is reached, many of the structural problems identified by Mostakhdemin-Hosseini—including fiscal imbalances, monetary expansion and weak investor confidence—would remain unresolved.

As Iran twice came from behind to draw 2-2 at SoFi Stadium in Inglewood, California, fans cheered different goals for different reasons. Some celebrated every Iranian attack. Others openly rooted against a team they view as inseparable from the Islamic Republic.

The divided reactions reflected a question that has become increasingly fraught since January 8-9, 2026, when the Islamic Republic launched a nationwide crackdown on anti-regime protesters that killed tens of thousands of unarmed civilians: can one support Team Melli without supporting the state it represents?

The trauma of those events continues to reverberate far beyond Iran's borders.

At SoFi Stadium, one fan wore a custom jersey marked "8-9," a reference instantly recognizable to many Iranians as the dates of the deadliest two nights in Iran's modern history.

"I felt proud to be Iranian, but with a mixed bag of emotions, carrying the weight of everything that the regime has done and what the people have suffered," actress and activist Nazanin Nour told Iran International.

Nour said she ultimately decided to attend the game despite her conflicted feelings because the regime has taken so much from Iranians worldwide, and she did not want it to deprive her of the joy of the sport as well.

"I think everybody's feelings are informed by their pain and trauma and everything that we've witnessed over the last not just few months but 47 years," she said. "It makes sense that everybody feels like this is a really weird time but still a time to be proud of who we are and where we come from."

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A team added

Since the 2022 Woman, Life, Freedom protests, players have faced scrutiny over whether they sing the national anthem, meet state officials or publicly support protesters.

Supporters and critics alike increasingly view the national team through a political lens because it officially represents the Islamic Republic.

While some players and football federation officials have shown alignment with the state, others have faced pressure for expressing solidarity with anti-government protests or refusing to sing the national anthem.

Former Iranian national team goalkeeper and coach Mohammad Rashid Mazaheri has been held by Iranian authorities since late February 2026 after criticizing the leader in an Instagram post.

For many Iranians, his case is another reminder of how even prominent athletes can face severe repercussions—even death—for expressing dissent.

"We're a world away from past World Cups, when, regardless of politics, Iranians inside the country and across the diaspora were united behind Team Melli," said Holly Dagres, a senior fellow at the Washington Institute.

That unity was perhaps best illustrated in 1998, when Iran's victory over the United States sparked celebrations from Tehran to Los Angeles.

Pride and protest

Before kickoff, hundreds of protesters gathered outside SoFi Stadium waving anti-government signs and the pre-revolution Lion and Sun flag in a city home to one of the world's largest Iranian diasporas.

Despite FIFA's ban on the Lion and Sun flag, videos circulating online showed numerous fans displaying it inside the stadium.

Among those in attendance was activist Mersedeh Shahinkar, who was blinded in one eye after being shot directly in the eye by security forces during the 2022 protests. Shahinkar, who later fled Iran and now lives in the United States, arrived carrying a Lion and Sun flag.

Shahinkar confronted supporters of the Islamic Republic both inside and outside the stadium, where tensions at times spilled into verbal confrontations and some spectators called fans carrying Iran’s current flag "terrorists."

At times, Shahinkar pointed to the empty eye socket left after she was shot during the 2022 protests, a reminder of the price many Iranians have paid in opposing the state.

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Iranian-American news anchor Shally Zomorodi later posted a video to Instagram with tears in her eyes, saying two men confronted her husband over his Lion and Sun logo.

"The hardest part of tonight," she wrote. "Two Iranian men saw my husband with the Lion Sun logo on his shirt and started cursing at him and tried to start a fight with Bruce."

But the atmosphere was not uniformly hostile, said Nour, who witnessed fans carrying Lion and Sun flags sitting near supporters displaying Iran’s official flag.

"I just saw people enjoying a game and being respectful of each other's opinions," she said.

Inside the stadium, boos rang out during the national anthem while many fans appeared to cheer individual players rather than the state they represent.

After the match, Iranian goalscorer Ramin Rezaeian pushed back when asked by a US journalist about fans whistling and booing during the national anthem.

"That's none of your business," he said. "What happens between Iranians is our own matter, and we will resolve it ourselves."

The same arguments played out far from California.

In North Vancouver, home to a large Iranian Canadian community, some crowds—even those displaying Iran's pre-revolutionary flag—erupted in cheers when Iran scored against New Zealand.

A sign of just how complicated the issue can be.

"We're here for the players only," Zina Monjazeb of Los Angeles told Reuters. "We're not here supporting the regime, at all."

Others rejected that distinction entirely.

"We believe that this is not the Iranian team. This is the Islamic regime," Naderi Alizadeh, 39, of San Diego, told Reuters.

In one scene captured on social media, Iranian player Mehdi Taremi is seen handing his shirt to a fan displaying the Lion and Sun flag.

For some Iranians, Team Melli remains a source of national pride distinct from the state it represents. For others, the jersey has become inseparable from the government behind it.

Ninety minutes of football did not resolve the argument. But for one night, it revealed just how deeply it now runs.