IMF, US sanctions have scuppered the Iranian economy: -9.5%

For the experts, the decline is even more significant than the initial 6% estimates. Confirmed data released last week by the World Bank which speaks of a trade volume down by 90%. The Islamic Republic is going through "serious macroeconomic hardship". Inflation at 35.7%.

Tehran (AsiaNews / Agencies) - According to the forecasts of the experts of the International Monetary Fund (IMF) the Iranian economy is destined to contract by 9.5% in the current year, with a further contraction compared to the initial forecasts that stood around the 6%. A collapse that has already had serious repercussions on people's lives and that is the result of US sanctions against the Islamic Republic.

The IMF forecast, published yesterday in the annual World Economic Outlook report, are in line with the gloomy forecasts already released last week by the World Bank. By the end of the 2019/20 financial year, the Iranian economy will be 90% lower as a total volume than the previous two years.

The Islamic Republic, one of the most important oil producers in the world, has seen a surge in the proceeds from the sale of crude oil since the signing of the nuclear agreement in 2015. A historic pact with - among others - the United States, China and Russia , which put an end to the sanctions imposed three years earlier against the ayatollahs' atomic program.

However, the agreement was short-lived and Donald Trump's victory in the US presidential elections in 2016 opened a new phase of tension between Iran and the United States, culminating in the decision by US President Donald Trump in May last year to withdraw from the 2015 nuclear agreement (JCPOA). This heightened US-Iran tensions, triggering a serious economic crisis in the Mideast country.

The White House introduced the toughest sanctions in history and boosted US military presence in the region, negatively impacting Iran’s oil exports and the life of ordinary Iranians.

For many analysts, sanctions are one of Washington’s top weapons in its economic war against the Islamic Republic. And the policy of maximum pressure has already inflicted serious damage on the population, like causing shortages in drugs, like those use in chemotherapy treatment.

In recent months, the IMF had forecast a 6% contraction for the Iranian economy for the current year. However, estimates were prior to Washington's April decision to end six months of exemptions that had allowed eight major importers to continue buying Iranian crude, albeit at low volumes.

The fund said Iran, along with other emerging economies, continues to experience "a serious macroeconomic hardship". A decline in the Iranian currency, following the reintroduction of sanctions, has effectively interrupted the flow of Iran's foreign trade and fueled annual inflation, which for IMF experts will reach 35.7% this year.

On the basis of the official rate, one dollar is traded at 42,000 rial (the local currency). In fact, according to the website bonbast.com, which specializes in currencies, the current market value is around 115 thousand rials per dollar.