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As bad as war? Activity steps Trump deeper economic pain Iran


In the 40 years of the Islamic Republic of Iran, 2019 is shaping up to be one of the worst for the economy, which has weathered wars, sanctions and oil declines.

Even before the United States decided to toughen sanctions against Iran's oil last week, the rial currency has lost two thirds of its value against the dollar and the International Monetary Fund is expected to gross domestic product will shrink by 6 percent.

In order to put the damage in the long term, once the economy has suffered from a deep recession were during the war with Iraq and oil prices decline in the 1980s, and the height of past US sanctions in 2012.

Inflation could reach an average of 50 percent, the highest level since 1980, a senior IMF representative said Sunday. The grim statistics is on par with the Sudan in crisis, with only Venezuela and Zimbabwe – two countries which was in political turmoil – is expected to fare worse, according to IMF estimates show.

"We are in uncharted territory," said Cyrus Ratstsagi, president of the business consulting Tehran on the basis of Ara Enterprise, which works with foreign investors. "It was a revolution, a war. There have been previous sanctions, but never before had so much pressure economically and at the international level in the country. "

The crisis will heap further pressure on the Iranian officials locked in a battle with US President Donald Trump and his allies in the Middle East. Although Trump has promised to roll back what he calls Iran's destabilizing presence in the region, critics say his policies, it is empowering hawks features more moderate politicians who performed the termination of the international isolation of the country through the establishment of closer relations with the West.

Trump pulled America from 2015 nuclear agreement with Iran and the newly introduced sanctions before the economy can fully recover from the punitive measures under the Obama and Bush administrations. While President Rouhani was able to curb inflation, his government struggles to rebuild the country's banks and to create enough jobs.

In its latest move, the United States completed a waiver, allowing some countries to buy Iranian oil in order to reduce the critical export of Iranian oil to zero.

The total cost to the economy will depend on how Iran's exports actually fall Zhihed Azor, Head of Middle East and Central Asia Department of the IMF, said in an interview with & # 39; S. "We need to have more clarity on a zero which means," he said.

China, India and Turkey – all of the major buyers of Iranian oil system failure – made it clear that they are protesting against cuts. Iran claims that eliminates all its crude oil exports will be impossible.

Foods, drugs

Vanity can send domestic prices higher. "It is clear that the situation will get worse," said Azour. Authorities distribute subsidized food to protect the poorest citizens, while the lack of medicines received.

Ratstsagi said that his talks with senior Iranian officials indicated that they had planned for various scenarios, while those for the unlikely event of a conflict.

Forecasts issued by the US decision to show Iran's GDP is set to contract by 6 percent this year from 4 percent in 2018, oil prices, Iran has to balance its budget is projected to jump to $ 125.6 per barrel from $ 113.8 in 2018 and $ 64.8 in the previous year. Brent crude was trading at more than $ 71 on Monday.

Azour said that Iran must take steps to alleviate the short-term economic pain, including as a result of which the official exchange rate in accordance with market forces and the elimination of deficiencies in the financial system by implementing anti-money laundering and terrorist financing laws.

The authorities also need to "repair or expand their social protection mechanisms to address the additional vulnerabilities" for the poor, he said.

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