Page 4 - IRANRptNov20
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1.0 Executive summary
Iran’s gross domestic product (GDP) officially contracted 3.5% y/y during the first quarter of the 2020/2021 Persian calendar year (March 20 to June 20), according to the Statistical Centre of Iran (SCI). A double whammy of inflationary pressure exerted on the economy by the impact of heavy US sanctions and a severe coronavirus (COVID-19) outbreak wreaked havoc on the already struggling economy.
Iranians are too lax in complying with coronavirus (COVID-19) restrictions, Iran’s government said on October 27. Officials spoke out as the country, enduring its third wave of the pandemic, again set daily records for infections and deaths. On available figures, Iran is enduring the worst coronavirus outbreak in the Middle East, opting instead to only publish the number of people showing COVID-19 symptoms, even though people displaying no symptoms can spread the virus. Iran on October 26 reported a daily death toll of 346, pushing the overall official toll to 33,299. New cases stood at 6,968, bringing the total to 581,824.
The US this week imposed sanctions on Iran’s Minister of Petroleum as well as various state-owned companies related to the sector in a final turn of the knife before Americans go to the ballot on November 3. He added that the sanctions had been imposed because of the oil industry’s support for the Islamic Revolutionary Guard Corps (IRGC) and the elite Quds Force (QF). Iranian crude production fell to 2mn barrels per day, according to an OPEC survey by S&P Platts, a drop of 1.1mn bpd year on year.
The move follows the imposition of strictures on 18 banks as Washington targeted the financial sector.
The result of next week’s election is likely to have significant repercussions for the Iranian economy, with incumbent President Donald Trump envisaged sticking to his hardline approach, while Democrat nominee Joe Biden has said he would be open to dialogue with Tehran.
Meanwhile, on October 18, the Islamic Republic celebrated the official end of a years-long UN conventional arms trading embargo. The embargo’s termination came in line with provisions under the 2015 nuclear agreement called the Joint Comprehensive Plan of Action (JCPOA) with Tehran, despite the US administration's efforts in the UN Security council to renew the embargo during a vote in August. Officials claimed that they were once again free to buy and sell conventional weapons. However, the US was quick to warn any country entering into arms deals with Iran that they would be sanctioned.
The severe depreciation of the Iranian rial (IRR) in the face of US sanctions is driving high inflation rates in Iran. Inflation in Iran stood at 27.8% y/y in the fourth Persian calendar month (ended June 20). Average inflation in the previous Persian month was measured at 29.8%.
Iran’s rial sinks to another new all-time low on October 11 at 317,570 for the first time on the unregulated free market in Tehran after the US last week introduced sanctions that mean that Iran is now almost entirely cut off
4 IRAN Country Report November 2020 www.intellinews.com
