Iran war increasing inflation, straining US munitions: congressional report

The US war on Iran is worsening inflation and straining the country’s munitions stockpiles, a report from the nonpartisan Congressional Budget Office (CBO) has found.

The report, released on Tuesday, found that the cost of the six-month war has reached $38bn and is expected to rise by $3bn per month. The war is projected to increase inflation by 0.5 percentage points in the first three months of 2027.

“Donald Trump’s disastrous war in Iran has already taken the lives of brave American servicemembers and left others wounded,” Brendan Boyle, a top Democrat on the US House of Representatives Budget Committee who requested the study, said in a statement.

“Beyond that human toll, this nonpartisan CBO report makes clear that the war has also cost American taxpayers tens of billions of dollars and counting, while continuing to drive up costs.”

The report comes as the Trump administration faces growing criticism over the unpopular war, launched by the US and Israel in February. The conflict has caused disruptions to the global energy market and contributed to rising prices as voters express concern over the cost of living ahead of the November midterm elections.

The CBO estimate is in line with those offered by Secretary of Defense Pete Hegseth during congressional testimony in July, during which he placed the cost of the war at $37.5bn. Hegseth urged Congress to approve a dramatic increase in the US military budget, already the largest in the world by a significant margin.

The Pentagon chief also slammed critics of the war during the heated testimony, denying that the conflict, which Trump initially estimated would last several weeks, was turning into a “quagmire”.

Reports have also found that the war has exhausted US supplies of key munitions, stretching the military’s ability to fulfil commitments in other parts of the world. The CBO report estimated that it could take up to five years to replenish US munitions stockpiles.

The report does not include borrowing costs associated with the war or Iranian attacks that have hammered US military installations in the Middle East.

The Trump administration has angrily denied reports on flagging munitions stockpiles and continued to argue that the war is worth the cost.

“With the temporary exception of Oil, prices are coming down sharply, and Oil will drop like a rock as soon as the Military Conflict with Iran is over, and that will not be long,” Trump said in a social media post on Monday.

The CBO read-out comes one day after a report on the war compiled by inspectors general at the Pentagon, a government watchdog, detailed munitions shortfalls and production bottlenecks, along with the loss of dozens of US aircraft during the war.

“We have everything required to strike at the time and place of the president’s choosing,” Pentagon spokesperson Sean Parnell said after reports of munitions shortfalls.