Iran’s economy is expected to shrink by 9.5% this year, the International Monetary Fund (IMF) said on Tuesday. Reports from Iran’s state-run media also indicated a sharp drop in Iran’s industrial production.
The IMF forecasts, published on Tuesday in the fund’s World Economic Outlook report, are not far from estimates given last week by the World Bank, which said the Iranian economy by the end of the 2019/20 financial year would be 90% smaller than it was just two years ago.
The World Bank report argues that the US government’s “maximum pressure” policy on the regime through sanctions has reduced the regime’s oil revenues, stagnated the economy and has lowered the national currency’s value.
According to the latest monthly report by Iran’s Ministry of Industry, many of the production indexes in the country have declined in the first quarter of this year.
The report, posted on the website of Iran’s Ministry of Industry, Mining and Commerce, said Iran’s industrial production of some goods including automobiles and TVs had plummeted.
The US imposed sanctions on Iran’s steel and mining sector on May 8. On June 7, the US Treasury imposed sanctions on Iran’s petrochemical industry for its support of the Islamic Revolutionary Guards Corps (IRGC) and its affiliated companies.
In the automotive sector, this year’s first quarter production dropped by 40.4% to below 185,000 units. The production of pickups, buses and trucks decreased by 10.3%, 59% and 70% respectively.
There is also a significant drop in the production of household items and small appliances. It is worth noting that Mohammad Reza Farivari, a member of the board of directors of the Iranian Household Appliances Association, recently announced that the active capacity of Iran’s home appliance manufacturers was currently between 25 to 30 percent.
Because of US sanctions and government corruption and mismanagement, Iran’s Customs Administration (IRICA) and Trade Promotion Organization (TPO) have refrained from publishing reports on foreign trades for the last several months.
However, statistics from Iran’s Ministry of Industry show that the country’s total non-oil exports in the first quarter of the year fell 50 percent to about $11.5 billion. Iran’s Imports also fell by 8.7%, just shy of $ 1.5 billion.