Page 4 - IRANRptAug20
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1.0 Executive summary
The Islamic Republic is struggling to cope with the twin effects of the coronavirus spread and strangling sanctions levied by the US, which have hampered efforts to control people’s daily activities given the pressure they have placed on the country and its people to stay economically active. Iran is suffering a second spike of virus cases which began with people in recent months meeting for religious occasions and national holidays and the reopening of stores, government officials have previously said.
Iranian officials said on August 2 that the latest one-day rise in confirmed coronavirus (COVID-19) infections in Iran was the country’s highest in nearly a month. Health Ministry spokeswoman Sima Sadat Lari said 2,685 people had tested positive for the virus in the past 24 hours, the highest count since July 8. Iran has the ninth-most infections of any country at more than 309,437.
COVID-19 has officially killed 17,190 Iranians, the 10th-highest death toll in the world. However, Iran has announced an ‘excess deaths’ statistical breakdown for the pandemic period meaning it is difficult to say how many other deaths not blamed on the virus did in fact result from it.
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%.
The IRR has continued to tank against hard currencies in recent days. It reached a record weak level of IRR255,500 to the dollar on Iran’s unofficial market on July 18. The ongoing strain of US sanctions, a second, and larger, wave of the coronavirus (COVID-19) and a string of suspicious explosions that have occurred across the country lately have collapsed public trust in the Rouhani administration.The currency that was trading at around 32,000 to the USD in 2015 when Iran signed the nuclear deal with six world powers.
The Tehran Stock Exchange’s main index, the Tedpix, smashed through the 2mn mark on August 2, the first time ever it has moved past the threshold. Amid Iran’s economic dire straits, investors continue to pick out one of the few profit-making spheres of investment, but anxieties that a massive bubble is building up have not gone away.
Britain, France and Germany said on June 19 that they would not support an attempt by the US to unilaterally trigger the reimposition of United Nations sanctions on Iran. However, they added that they proposed to enter into talks with Tehran over its ongoing violations of the nuclear deal. Under Iran’s deal with six world powers (formally the Joint Comprehensive Plan of Action, or JCPOA) to introduce verified restrictions on the Iranian nuclear development programme in return for the lifting of sanctions, a UN embargo on arms sales to the Islamic Republic is due to expire in October.
The World Bank’s Global Economic Prospects report released on June 8 said that Iran will likely have to reckon with a GDP contraction of 5.3% in
4 IRAN Country Report August 2020 www.intellinews.com
