Page 4 - IRANRptJul20

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. The unofficial death toll from the virus in Iran is, meanwhile, widely thought to be considerably higher than the recorded figure of 10,130 (as of June 25) ​with some expatriate community estimates placing the likely real figure above 40,000 as early as May.
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 by June 24 stood at IRR196,500 to the dollar ​in Ferdowsi street unofficial market trading by the end of the business day, according to Bonbast.com. The previous day ​brought an all-time low of IRR205,000​.​The currency that was trading at around 32,000 to the USD in 2015 when Iran signed the nuclear deal with six world powers.
Switzerland’s special financial channel for humanitarian trade with Iran (SHTA) has been earmarked as the route that Tehran would use to secure urgent funding amounting to $5bn from the International Monetary Fund (IMF) loan​, President.ir website announced on May 26. However, there is as yet no sign that the US will refrain from using its veto to stop such funding going to the Islamic Republic, despite the difficulties Iran faces in addressing its coronavirus (COVID-19) outbreak. The Trump administration officials claim that Iran’s ruling regime cannot be trusted to spend all of the money on humanitarian needs.
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 2020​, partly reflecting the effects of its large-scale coronavirus (COVID-19) outbreak on domestic consumption and the services sectors.
According to the IMF’s ​World Economic Outlook released on April 14, Iran will this year suffer a GDP contraction of 6%. ​ ​Warning that the “Great Lockdown” brought about around the world by the coronavirus (COVID-19) pandemic would cause the worst recession experienced internationally since the Great Depression of the 1930s, the IMF said Iran was inevitably in for another tough year following last year’s estimated 7.6% decline in economic output, although it added that the country might achieve growth of 3.1% in
4​ IRAN Country Report July 2020 www.intellinews.com