Jihad Azour, director of the IMF’s Middle East and Central Asia Department, told Reuters on Monday that Iran would not experience any extra pressure from the US sanctions two years after they were reimposed following Washington's withdrawal from an international agreement on Iran’s nuclear program.
“The estimate is that ... sanctions that were reintroduced last year and tightened this year, next year will not have an additional impact,” said Azour.
A drop in the Iranian currency following the reimposition of sanctions has disrupted Iran’s foreign trade and boosted annual inflation, which the IMF forecasts at 35.7% this year and 31% next year.
Azour said Iranian authorities should align the official exchange rate with the market rate to control inflation.
The comments come as many experts believe Iran has largely managed to offset the impacts of the US sanctions through a series of measures that have seen the country diversify its economy from oil, Press TV wrote.
The IMF has predicted that Iran would feel the highest degree of pain caused by the sanctions this year as the country’s economy would shrink by 9.5%.
However, estimates suggest that Iran’s gross domestic product (GDP) would continue to grow at a flat rate next year, meaning that the US sanctions, some of them unprecedented in the history, would lose their function.
The World Bank issued a report earlier this month saying Iran’s GDP would slightly increase in the next couple of years.
It said the Iranian economy would shrink by 8.7% in 2019/20 but insisted that the GDP would bounce back in the next two financial years with a slight growth of 0.5% annually.
Iranian government reports on major economic indicators, including on inflation and unemployment rate, also suggest that the economy is recovering from losses suffered in the summer of 2018 when the national currency dipped to historic lows of 190,000 against the US dollar.
The rial was trading at 113,500 against the dollar on Monday based on information provided by currency price monitoring websites and reports from Tehran’s unofficial exchange market.
All those came as US Treasury Secretary Steven Mnuchin insisted on Monday that sanctions imposed on Iran were effective despite numerous assertions that Washington and allies have failed to reach their objectives from pressuring Iran economically.
“We have executed on a maximum pressure campaign for sanctions. They have worked, they are working, they are cutting off the money,” Mnuchin said while on a visit to the Israeli-occupied Palestinian territories.