Iran Can Manage Hit From Sanctions: IMF

Should Return To Growth Next Year Despite Restrictions

By Reuters

Published October 09, 2012.
  • Print
  • Share Share

Iran will manage to bring its high inflation lower and return to growth next year despite Western sanctions over its nuclear programme, according to projections from the International Monetary Fund.

The IMF forecasts, which also include a small trade surplus this year and next, suggest that although the sanctions are damaging Iran by cutting its oil exports, they are not likely to cause a collapse of its economy.

However, much of the IMF analysis is based on statistics provided by the Iranian government, which private economists say may not be reliable, and most of the report was prepared before Iran’s currency, the rial, plunged by about a third against the dollar in 10 days through Oct. 2.

In its semi-annual World Economic Outlook, the IMF forecast Iran’s gross domestic product would shrink 0.9 percent this year after 2 percent growth in 2011.

Its prediction for this year was a downgrade from a forecast of 0.4 percent growth in its last report in April, but the IMF projected GDP would expand next year by 0.8 percent.

The IMF expects inflation to moderate to 21.8 percent in 2013 from 25.2 percent in 2012; many private economists, however, think inflation is well over 30 percent.

It predicted unemployment would hit 14.1 percent this year and 15.6 percent next, up from 12.3 percent in 2011.

Iran’s current account, its balance of trade in goods and services, is expected to enjoy a surplus of 3.4 percent of GDP this year and 1.3 percent next year, the IMF said.

That would be a big drop from a surplus of 12.5 percent in 2011, but the forecast still suggests it may not face a crippling balance of payments crisis due to the sanctions.

The forecasts assume an average global oil price of $106.18 a barrel in 2012 and $105.10 in 2013, the IMF said, but it did not detail many other assumptions behind its predictions, including the extent to which the sanctions would cut Iran’s oil exports. The sanctions’ impact has increased in the last several months, according to Western government officials.

As an international body, the IMF often faces a delicate balance in maintaining good relations with the countries it monitors while pressing them to provide accurate data and adopt economic policies it favours.

In July 2011, before Western sanctions were tightened, the IMF issued a report praising the Iranian government’s decision to slash energy and food subsidies, calling the policy “a unique opportunity for Iran to reform its economy and accelerate economic growth and development”.

Some private economists called the report over-optimistic, saying it underestimated the risk of the subsidy cuts causing runaway inflation and damaging consumer spending power.


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • The Jewish bachelorette has spoken.
  • "When it comes to Brenda Turtle, I ask you: What do you expect of a woman repressed all her life who suddenly finds herself free to explore? We can sit and pass judgment, especially when many of us just simply “got over” own sexual repression. But we are obliged to at least acknowledge that this problem is very, very real, and that complete gender segregation breeds sexual repression and unhealthy attitudes toward female sexuality."
  • "Everybody is proud of the resistance. No matter how many people, including myself, disapprove of or even hate Hamas and its ideology, every single person in Gaza is proud of the resistance." Part 2 of Walid Abuzaid's on-the-ground account of life in #Gaza:
  • After years in storage, Toronto’s iconic red-and-white "Sam the Record Man" sign, complete with spinning discs, will return to public view near its original downtown perch. The sign came to symbolize one of Canada’s most storied and successful Jewish family businesses.
  • Is $4,000 too much to ask for a non-member to be buried in a synagogue cemetery?
  • "Let’s not fall into the simplistic us/them dichotomy of 'we were just minding our business when they started firing rockets at us.' We were not just minding our business. We were building settlements, manning checkpoints, and filling jails." What do you think?
  • PHOTOS: 10,000 Israel supporters gathered for a solidarity rally near the United Nations in New York yesterday.
  • Step into the Iron Dome with Tuvia Tenenbom.
  • What do you think of Wonder Woman's new look?
  • "She said that Ruven Barkan, a Conservative rabbi, came into her classroom, closed the door and turned out the lights. He asked the class of fourth graders to lie on the floor and relax their bodies. Then, he asked them to pray for abused children." Read Paul Berger's compelling story about a #Savannah community in turmoil:
  • “Everything around me turns orange, then a second of silence, then a bomb goes off!" First installment of Walid Abuzaid’s account of the war in #Gaza:
  • Is boredom un-Jewish?
  • Let's face it: there's really only one Katz's Delicatessen.
  • "Dear Diaspora Jews, I’m sorry to break it to you, but you can’t have it both ways. You can’t insist that every Jew is intrinsically part of the Israeli state and that Jews are also intrinsically separate from, and therefore not responsible for, the actions of the Israeli state." Do you agree?
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.