When shopkeeper Ali closed the metal shutters of his small stall in Tehran’s Grand Bazaar in late December, it was not an act of political theatre. It was survival. The price of flour had jumped again overnight, his savings were losing value by the hour, and customers were arguing over costs he could no longer control. “People think we are greedy,” he said quietly, speaking on condition of anonymity. “But the money itself is collapsing.”
Scenes like this lie at the heart of the mass anti-government protests that have swept across Tehran and dozens of Iranian cities since 28 December 2025. What began as economic anger directed at inflation, food shortages and the dramatic fall of the Iranian rial, has rapidly transformed into the most serious challenge to the Islamic Republic since the nationwide protests of 2022-2023. An economy that broke the social contract.
Iran’s current unrest is rooted in a prolonged economic crisis that many families say has finally crossed a psychological threshold. Official inflation reached 48.6 percent in October 2025 and remained above 42 percent in December, a pace that has shredded household budgets. For middle- and working-class families alike, wages have failed to keep up with basic living costs, forcing difficult choices over food, healthcare and education.
The collapse of the rial has been especially destabilizing. On 29 December, the currency fell to around 1.45 million rials to the US dollar, before briefly strengthening after government intervention. By 6 January, it had plunged again to about 1.5 million, triggering fresh price hikes for imported goods and essentials.
Small businesses on the other hand, which is the backbone of Iran’s urban economy, has been devastated by the volatility. Bazaar merchants, known collectively as the Bazaari, have historically played a crucial role in Iranian politics, including during the 1979 revolution. Their decision to strike, sent a powerful signal that the economic crisis had eroded trust between the state and one of its traditional support bases. More like from bread-and-butter issues to political rupture.
The protests initially focused on livelihoods, but their tone quickly shifted. As demonstrations spread from Tehran’s bazaars to universities and public squares, slogans began to reflect deeper political grievances. Students joined workers, pensioners and shopkeepers, linking economic hardship to demands for systemic change.
In cities such as Isfahan, Shiraz and Mashhad, crowds chanted against Supreme Leader Ayatollah Ali Khamenei and called for freedom, accountability and in some cases, the return of the monarchy. Pro-monarchist chants referencing Reza Pahlavi, the son of Iran’s last shah, highlighted the absence of a single unifying opposition ideology and the breadth of public frustration with the current order. According to a US-based human rights organization, Iran’s security forces have killed at least 78 protesters and arrested more than 2,600 people during two weeks of anti-government demonstrations. The unrest, driven by deepening economic hardship, has reportedly spread to over 150 cities nationwide, emphasizing the scale of public anger. However, the true extent of casualties and arrests remains difficult to independently verify, as restrictions on media access and information flow continue to limit transparency around the state’s response to the protests.
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