GOLDEN VALLEY, Minnesota, Jan 8 (Reuters) - Iran's economy is facing high inflation and other challenges, partly due to U.S. sanctions, U.S. Treasury Secretary Scott Bessent said on Thursday, underscoring Washington's concerns about Tehran cracking down violently on anti-regime protests.
"The Iranian economy is on the ropes," Bessent told the Economic Club of Minnesota, underscoring President Donald Trump's warning to Tehran to avoid harming protesters.
"It's a very precarious moment. He does not want them to harm more of the protesters. This is a tense moment," the U.S. Treasury secretary said, referring to Trump's threat on Sunday to hit Tehran if it began killing protesters.
"We're watching it very closely. If they start killing people like they have in the past, I think they're going to get hit very hard by the United States," Trump told reporters aboard Air Force One on Sunday.
Rights groups say at least 25 people were killed in Iran during the first nine days of protests that started in the bazaar of Tehran over the plunging value of the currency and soaring inflation, the biggest wave of dissent in three years.
The protests have since spread nationwide amid deepening distress over rocketing inflation driven by mismanagement and Western sanctions, and curbs on political and social freedoms.
Iranian authorities have acknowledged the economic hardships facing Iranians, but accused networks linked to foreign powers of stoking the protests. Iran's top judge warned protesters on Wednesday there would be "no leniency for those who help the enemy against the Islamic Republic."
Bessent said it was clear that "what had been an affluent society that still maintained a high standard of living is really crumbling, and a lot of that is through the sanctions."
He said it was unclear how Tehran planned to finance the rebuilding of its nuclear program.
Trump's threat to come to the aid of protesters if security forces fire on them comes seven months after Israeli and U.S. forces bombed Iranian nuclear sites in a 12-day war. Trump often references the U.S. and Israeli attacks as an example of what he sees as his strong leadership on global affairs.
(Reporting by David Lawder in Minneapolis and Andrea Shalal in Washington; editing by Diane Craft)
