IMF Forecasts Limited Sanctions Impact

            The International Monetary Fund (IMF) forecasts economic growth and lower inflation for Iran in 2013, suggesting that sanctions have taken a limited toll on the economy. The IMF’s semi-annual World Economic Outlook estimates that Iran’s gross domestic product (GDP) will fall .9 percent in 2012, however GDP is projected to increase by .8 percent in 2013 and 2 percent in 2014. The projections do not account for the rial’s recent fall in value, and the IMF relied on Iranian government statistics to fill in data gaps. The calculations also depend on the price of oil holding at $106.18 a barrel in 2012 and $105.10 in 2013.

            Not all of the economic indicators are encouraging for Iran. Sanctions have cut Iran’s crude oil production to less than half of its peak production. In August 2012, the Internal Energy Agency estimated Iran is producing only 2.9 million barrels per day. The IMF forecasts Iran to maintain a trade surplus of 3.4 percent of its GDP for 2012 but this is small compared to its 12.5 percent surplus in 2011. The trade surplus is expected to continue falling for the next two years. Unemployment may hit 14.1 percent this year, up by nearly 2 percent since 2011. It is expected to rise to 15.6 percent in 2013. The report suggests that Iran’s economy has been stunted but not crippled.

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