IMF Expects Deeper Slowdown in Iran Economy

Financial Tribune- IMF's latest World Economic Outlook report shows the country will experience zero percent economic growth in 2020.
The global lender had previously forecast Iran’s economy to shrink by 6% this year, but that estimate preceded Washington’s decision in April to end six months of waivers which had allowed Iran’s eight biggest oil buyers to continue importing limited volumes, Reuters reported.
"Iran, a large oil producer, saw its oil revenues surge after a 2015 nuclear pact agreed with six major powers that ended a sanctions regime imposed three years earlier over its disputed nuclear program. But new sanctions brought in after US President Donald Trump withdrew from that deal in 2018 are the most painful imposed by Washington, targeting nearly all sectors of Iran’s economy," Reuters wrote.
The fund said Iran, along with other emerging market economies, continues to experience “very severe macroeconomic distress.”
The report came after the World Bank said in an autumn update that Iran’s economy is expected to contract further by 8.7% in 2019-20 due to external shocks to oil and gas output.
Plummeting exports come after the expiration of US waivers to major importers of Iranian oil and tightening of banking restrictions in addition to new sanctions being imposed on the country’s petrochemical, metals, mining and maritime sectors, the WB report reads.
"The expected deterioration in economic growth would mean that by the end of 2019-20, the economy would be 90% of its previous size compared to just two years earlier. The oil sector decline, coupled with international trade and capital flow restrictions, has negatively influenced economic activity in key non-oil sectors, including automotive, machinery and construction, which have faced supply chain challenges and higher operational costs. Similarly, the GDP expenditure components are to be strongly influenced by the shock to exports. However, the simultaneous reduction in imports is expected to moderate part of the downward pressure on the trade balance and the current account."