Sanctions to have no additional impacts on Iran's economy in 2020: IMF

October 29, 2019

TEHRAN - Director of the International Monetary Fund (IMF)'s Middle East and Central Asia Department said U.S. sanctions are not going to have any new major impacts on Iran’s economy in the upcoming year.

“The estimate is that ... sanctions that were reintroduced last year and tightened this year, next year will not have an additional impact,” Jihad Azour told Reuters.

According to IMF's latest regional outlook report for the Middle East and Central Asia, published Monday, Iran's annual inflation, which the IMF forecasts at 35.7 percent this year will reduce to 31 percent next year.

However, the country is expected to have a fiscal deficit of 4.5 percent this year and 5.1 percent next year, the fund said.

Based on the IMF report, Iran would need oil priced at $194.6 a barrel to balance its budget next year.

The report adds, however, that almost all the countries in the MCD region (Middle East and Central Asia) will experience some level of economic slowdown due to negative global factors like trade tensions as well as internal and regional turmoil.

“The outlook for the MCD region (Middle East and Central Asia) is driven by a large contraction in Iran in the short-term followed by a rebound in 2020,” the report said. “The risks around the forecast are skewed to the downside and are highly dependent on global factors.”

Iran's economy is expected to shrink by 9.5 percent this year, compared to a prior estimate of a 6 percent contraction, the IMF has said, but real gross domestic product (GDP) growth is expected to be flat next year.

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