IMF: US sanctions scuttling Iranian economy. And enriching Riyadh
The Iranian economy is set to fall by 1.5% for 2018 and 3.6% for 2019. Up to April the forecasts were of a plus 4%. Saudi Arabia reverses the route and scores a positive balance of 2.2%. Overall growth slashed by 3.7%, the Middle East and North Africa region suffers.
Tehran (AsiaNews / Agencies) - The entry into force of the sanctions against Teheran decided by the United States will have a very strong impact on the Iranian economy; on the other hand, Washington’s punitive measures are greatly benefiting Saudi Arabia, the historical rival of the Islamic Republic in the region, which can count on the increase in oil production. This is what experts from the International Monetary Fund (IMF) affirm, as they cut global growth forecasts to 3.7% for 2018 and announced a further decline for the next one.
Illustrating the World Economic Outlook, the IMF stresses that Iran's economy - linked to the production and sale of crude oil - is set to fall by 1.5% by the end of this year and 3, 6% in 2019. Until a few months ago, experts had assumed opposite numbers, with a growth of 4% for 2018 and also for the next year.
At the center of the controversy was the economic, diplomatic and commercial war launched by the US administration led by President Donald Trump. Last May, Washington imposed new sanctions, the toughest sanctions in history , after pulling out of the nuclear agreement (the JCPOA).
A decision that caused a significant drop in the Iranian economy and a collapse in oil sales, the goal of the second part of the sanctions that will be in force since 4 November. At the expense of it, it was primarily the weakest part of the population.
This decline in growth, explains the IMF, is the result of "reduced oil production". However, the trend should reverse for the following years [2020-23] and mark a "modest positive index". Iranian oil exports had touched 2.5 million barrels a day, helping to revive the country's life; in recent months production has fallen by half a million barrels a day and is set to fall in the near future, depriving Tehran of the "main source of income" to the full advantage of Saudi Arabia, the Sunni rival power to Shiite Iran.
If last year Riyadh was down by 0.9% last year, for 2018 a trend reversal is expected with a 2.2% increase that will increase to 2.4% in the following year. Oil prices have risen up to 70% since June last year, reaching $ 80 per barrel, a growth that has benefited Riyadh, which can count on even greater market shares.
In the report, IMF experts drastically reduced the growth figures across the Middle East and North Africa (Mena) region, dragged down by the collapse of the Iranian economy and rising energy costs. Now the forecasts speak of a 2% for this year (against 3.2% of the April forecast) and of 2.5% for 2019 (against 3.6%). "The downward revision - concludes the IMF - reflects to a significant extent the worsening of growth prospects for Iran, following the re-imposition of American sanctions".