IMF predicts lower contraction for Iran economy after pandemic

on April 15, 2021 | 11:48:51

The International Monetary Fund (IMF) has expected that the Iranian economy would do better in the wake of the current coronavirus pandemic compared to the previous fiscal year.

The IMF said in a report published Tuesday that the Iranian economy would shrink by 6 percent this year, up from 7.6 percent in 2019.

It said the slight growth would come despite the fact that Iran has been hit hard by COVID-19, the disease caused by the new coronavirus, with more than 73,000 people infected with the virus since the pandemic began in the country less than two months ago.

The estimate comes as Iran, an oil-rich country which has relied on crude revenues for years, has been effectively deprived of those finances since the United States imposed its sanctions on the country in November 2018.

However, US sanctions have prompted deep changes in the way the Iranian government finances the country while they have clearly led to increased manufacturing and exports for non-crude products.

Last year was one of the worst on record for Iran’s economy, the second largest in the Middle East region, as the decline in gross domestic product (GDP) was almost double the figure seen in 2017.

IMF’s prediction for a slight economic rebound in Iran in 2020 comes as many countries around the word are bracing for a deep recession in the year ahead mainly because of the coronavirus pandemic and its impacts on the global economy.

The IMF said the economy in the Middle East and North Africa region, which is home to some of the richest countries of the world, would slump as a whole by 3.3 percent, the biggest contraction seen since the end of 1970s.

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