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IMF Says Iran's GDP Will Decline By Six Percent In 2020

Traders work in Iran's stock exchange. FILE Photo.

In its most recent report on the world economy, the International Monetary Fund has said Iran's Gross Domestic Product, GDP, will decline by about six percent in 2020.

This would be the third consecutive annual decline of Iran’s GDP. In its report released on April 14, IMF put Iran’s GDP decline in 2019 at 7.6 percent and in 2018 at 5.4%.

Last year, IMF had forecast a 9.5 percent decline for 2019 but apparently it has revised the number upwards recently.

IMF has also predicted a flat GDP for 2020, but now it is forecasting a steep decline. The probable reasons behind the pessimistic assessment is falling oil prices and the economic impact of the coronavirus crisis.

The pandemic has hit Iran hard, killing thousands and infecting tens of thousands of people.

According to this report, world economic growth in 2020 will be negative 3 percent, as a result of the Covid-19 pandemic.

Iran’s oil exports have declined by around 90% compared with the period before the United States imposed sanctions on its crude exports. The daily exports now stand at less than 200,000 barrels, which in the current oil market will bring Iran a small income of less than two billion dollars in 2020, compared with $60 billion in 2018, before Washington imposed its sanctions.

IMF says inflation rate in Iran in 2019 was 41.1 percent and in 2020 it will hover around 34.2 percent. The main reason for such a high inflation rate is the falling value of Iran’s currency mostly due to U.S. sanctions.

Iran currently has the world’s highest inflation rate after Venezuela, Zimbabwe and Sudan. Its national currency has declined more than fourfold since early 2018.