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Sanctions hammered Iran saw GDP shrink 8.7% in 2019 and can’t expect growth in 2020 says World Bank
cheque payments for businesses.
The World Health Organisation’s (WHO's) emergencies head Michael Ryan said on March 11 that the COVID-19 situation in Iran was "very serious". The WHO had sent 40,000 testing kits to Iran but there was still a shortage of ventilators and oxygen, he added. "Iran and Italy are suffering now but I guarantee you other countries will be in that situation very soon," he commented.
The “economic war” waged by the US against Iran has exacted an even worse toll on the Islamic Republic’s economy than was anticipated if the latest World Bank assessment is correct.
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.
Iranian GDP in 2018 shrank by 4.9% following growth of 3.8% in 2017.
The effects of the US throttling of Iran’s economy pushed Iranian inflation 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%.
3.1 Macroeconomic outlook
Iran’s coronavirus-hit GDP to shrink 5.3% in 2020 says World Bank
Iran will likely have to reckon with a GDP contraction of 5.3% in 2020, partly reflecting the effects of its large-scale coronavirus (COVID-19) outbreak on domestic consumption and the services sectors, according to the June edition of the World Bank’s Global Economic Prospects report released on June 8.
In the January edition, released before the shock impact of the coronavirus pandemic, the international financial institution was predicting that Iran would have flat growth at exactly 0.0% following its two years of recession triggered by the reintroduction of US sanctions. Iran can at least look forward to 2.1% of growth next year if the World Bank’s latest forecasting proves correct. In January, it was only predicting 1%.
12 IRAN Country Report July 2020 www.intellinews.com
