In its latest report the World Bank says Iran had the biggest fall in Gross Domestic Production (GDP) in the world in 2019.
The report published on January 9 shows Iran’s GDP in 2019 fell 8.7 percent compared with 2018, which in turn was 4.9 percent lower than the previous year.
The U.S. decision in May 2018 to pull out of the Iran nuclear agreement and reimpose sanctions soured Iran's economy and led to a steep devaluation of its currency, bringing high inflation, lack of investments and high unemployment.
Oil sanctions particularly were a hard blow for Iran, which is has a weak economy mostly dependent on oil revenues.
The World Bank forecasts zero GDP growth for Iran in 2020 and one percent growth in 2021 but given the continuation of U.S. sanctions this forecast might prove to be optimistic.
The Bank has stopped to measure economic indicators in Venezuela and Libya due to political and economic chaos in those countries. As a result, Iran is now at the bottom of the list in terms of GDP growth.
The International Monetary Fund has estimated that Iran’s GDP has fallen by 9.5 percent this year, a bleaker picture than what the World Bank has offered. In industrial countries a small GDP contract over two quarters would be considered a recession and a 8-9 percent fall would come close to be labeled a depression.
World economic growth this year is estimated to average at 2.5 percent., but developing countries are threatened by unusually large debt increases and a reduction in labor productivity.