The International Monetary Fund announced today that due to Iran’s currency crisis, the Islamic Republic economy may contract by more than the IMF had previously predicted.
An earlier IMF forecast said the Iranian economy would decline by about 0.9 percent in 2012 and grow by 0.8 percent in 2013. AFP reports that Masood Ahmed, the head of the Middle East and Central Asia department of the IMF, said in an interview that the earlier prediction was based on data from before the rial’s steep fall against the dollar. He added that inflation may go as high as 25.2 percent, according to estimates.
Iran’s national currency has lost 40 percent of its value against the dollar in the past year, because U.S. and European Union sanctions against Iran’s oil and financial sectors are cutting into its oil exports.
Ahmed also points to a reduction in revenues from other sectors of the Iranian economy, such as agriculture.