Page 4 - IRANRptMar20
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1.0 Executive summary
Iran’s economy has been battered by US sanctions since Donald Trump pulled Washington out of the nuclear deal in May 2018 and switched back to a heavy sanctions regime. The Iranian rial (IRR) has dropped around fourfold against major currencies.
In the January 2020 edition of its Global Economic Prospects report released on January 9, the World Bank estimates that Iranian GDP contracted by as much as 8.7% in 2019, a year that saw the Trump administration gradually introduce tougher and tougher sanctions against Tehran including a drive to squeeze all Iranian oil off world export markets. In the June 2019 edition of the report, the international financial institution only foresaw a contraction of 4.5%.
In further bad news for Iran, while the World Bank six months ago was counting with a resumption of Iranian growth in 2020 to 0.9%, it now sees stagnation of 0.0%. And that figure, it added, “assumes that the impact of sanctions tapers somewhat”. Whether that tapering occurs may well depend on whether US President Donald Trump regards it as in his interests as his campaign to get re-elected in November ramps up.
The effects of the US throttling of Iran’s economy pushed Iranian inflation from about 10% in mid-2018 to more than 50% in mid-2019, partly reflecting the earlier severe depreciation of the Iranian rial (IRR) in the unofficial parallel market, but it subsided in late 2019 to below 30%. The IMF forecasts it will be 35.7% this year.
After months of gradual steps to reduce compliance with the nuclear deal, Iran said on January 6—days after the US drone assassination of second most powerful Iranian official Major General Qasem Soleimani and with Iranian officials also angry that Europe had still done nothing of consequence to protect Iran’s economy from the sanctions-led “economic war” unleashed against the Islamic Republic by Trump—that it would scrap the limits on enriching uranium agreed in the accord.
In a March 3 report, the UN’s International Atomic Energy Agency (IAEA) said that Iran’s stockpile of low-enriched uranium had expanded to 1,020.9 kilograms compared to the nuclear accord limit of 300 kilograms. In its previous report, released in November, the watchdog said the stockpile stood at 372.3 kilograms.
Violations of the JCPOA can lead to the reimposing of UN sanctions lifted under the 2015 deal. Iran has said it would be willing to move back to full compliance with the deal if Europe provides “meaningful” economic benefits in the face of US sanctions that are designed for force Tehran into a much tougher nuclear deal.
Furthermore, schools and universities in the Iranian holy city of Qom have been closed by officials following the deaths of two men from coronavirus which has sparked fears of an epidemic emerging in Iran. February 20 also saw Iraq close crossings at its border with the Islamic Republic, Iraq Airways suspend flights to and from Iran and Armenia and Azerbaijan intensify border checkpoint controls for anyone arriving from their
4 IRAN Country Report March 2020 www.intellinews.com
