The International Monetary Fund said on Thursday that the Iranian economy has entered a recession, in part due to U.S. sanctions.
The IMF World Economic Outlook report estimates Iran’s economy will shrink by 1.5 percent this year, with the trajectory continuing and going upward in 2019, contracting by 3.5 percent. The main factor, according to the analysis, is “reduced oil production.”
Before U.S. President Donald Trump withdrew the United States from in the agreement in May and soon thereafter reimposed sanctions which were lifted under the 2015 Iran nuclear deal, the IMF projected 4 percent growth for the Islamic Republic in 2018 and the following year.
However, the IMF predicts the recession will just occur through 2019, followed by the economy returning to “modest positive growth” between 2020 to 2023.
In addition to pressure on its oil market, Iran’s currency, the rial, has also hit record lows this past year. In late September, the rial fell to a low of 160,000 rials to the dollar.
Iran has also seen rising inflation and unemployment. Supreme Leader Ayatollah Ali Khamenei ordered officials to resolve the growing economic crisis, which has led to widepsread protests across the country, reaching a height this past summer.
“There are no problems in the country that we cannot resolve. … Officials should find solutions to overcome the existing economic hardship and to disappoint the enemy by resolving it,” Fars quoted Khamenei as telling officials on Wednesday night.
The next round of U.S. sanctions is on Nov. 4.
