Iran attacked U.S. targets this week after the killing of top Iranian general Qasem Soleimani in an American airstrike, leaving some investors questioning if the situation would lead to war. To be clear, updated data on Iran’s economy from official sources is not readily available. Here’s a look at six charts that might shed some light on the state of the Iranian economy.
Economy in recession
International sanctions to rein in Iran’s pursuit of a nuclear program have for years crippled the country’s economy.
Oil sector declines
Iran is estimated to have the world’s fourth-largest crude oil reserves, according to the World Bank. Much of the country’s economic growth and government revenues depend on the sale of crude oil. But restrictions on the sale of Iranian oil were among the U.S. sanctions that Trump reinstated two years ago. That’s one of the major reasons why forecasters, including the International Monetary Fund, expect the production and exports of Iranian crude oil to decline.
Shrinking trade
The fall in Iranian oil exports and international restrictions placed on other sectors — such as banking, mining and maritime — have caused the country’s total trade with the world to shrink.
Rising costs of living
The Central Bank of Iran has maintained a steady official exchange rate of 42,000 Iranian rials per U.S. dollar. But the currency is much weaker than that in the unofficial market, weakening to as much as 140,000 rials per dollar this month amid heightened tensions with the U.S., according to foreign exchange website Bonbast.com.
High unemployment rate
One main implication of a stagnant or declining economy is rising unemployment rate, which has been seen in Iran.
Widening fiscal deficit
The Iranian government has limited finances to roll out measures in order to lift the country’s economy. That has been exacerbated by overall subdued economy activity and restrictions on oil sale overseas, due to the sanctions in place.
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