Iran protests reignite: Economic collapse drives street unrest

WISE NEWS PRESS / ANKARA, TURKEY — JAN. 3, 2026

Rising prices and a deepening political deadlock have driven Iranians back to the streets, a resurgence that experts say was inevitable given the country's "zero growth" economy and crumbling state legitimacy.

While President Masoud Pezeshkian’s administration initially acknowledged the public's economic grievances, the tone has rapidly shifted. As demonstrations spread, officials are now labeling protesters as "rioters," threatening a severe crackdown as the crisis exposes the regime's inability to solve systemic corruption.

'Iran has been looted'

Economic analysts describe the situation as a collapse rather than a mere recession. Saeed Laylaz, a prominent economist, issued a stark warning just days before the unrest began, stating that "Iran has been looted and has no assets left externally."

Laylaz argues that 40 percent of the country's banking assets exist only on paper and that economic growth has stalled completely. According to him, the Islamic Republic is facing a crisis of legitimacy, unable to choose between preserving the system or protecting its corrupt components.

"The system has not yet concluded that it is more important than its components, which are corrupt to the bone," Laylaz said.

A regime in 'suspension'

Political analysts note distinct differences between the current unrest and the 2022 "Woman, Life, Freedom" movement. Navid Kalhorodi, a political expert, suggests the regime has been in a state of "suspension" following its recent 12-day conflict with Israel.

Unlike previous movements driven by social liberties, the current protests are fueled almost entirely by economic desperation. This makes it difficult for the government to blame "foreign enemies," although the narrative is shifting in that direction. Analysts argue that the younger generation has severed ties with both reformist and hardline factions, leaving them with no political outlet other than the street.

Pezeshkian’s 'talk therapy' fails

President Pezeshkian, who took office promising unity and reform, is facing criticism for his inaction. Local media outlets have dubbed his approach "talk therapy," highlighting his tendency to hold meetings without making decisions.

Despite meeting with striking shopkeepers and promising solutions, Pezeshkian is viewed by critics as indecisive. "The Pezeshkian government has reached a point of hesitation where no decision can be made," Laylaz noted. "There is no system capable of making a decision, even a wrong one."

The Trump factor and security threats

As the protests intensify, the geopolitical stakes are rising. US President Donald Trump recently threatened that the United States is "ready to strike" if the Iranian regime kills protesters.

Tehran has responded by warning against foreign interference. While Friday prayer leaders initially validated the public's economic concerns as "justified," the official rhetoric is hardening. The Secretary of the Supreme National Security Council, Ali Larijani, warned that "subversive elements" would face a decisive response, signaling that the window for tolerance is closing.

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