Western Gov’ts: Iran’s Economy Could Collapse Next Spring Due to Sanctions

Jason Berger — October 18, 2012 – 11:36 am | Iran Comments (0) Add a comment

A number of news stories appeared this week about the damage caused to Iran’s economy because of the international sanctions movement led by President Barack Obama.

The Los Angeles Times reported:

Western governments believe that Iran’s economy is imploding so quickly that it could essentially collapse next spring under the combined pressure of international sanctions, an oil embargo and internal mismanagement by officials in Tehran, said a European diplomat here.

Western government experts estimate that Iran will run out of foreign exchange reserves in six months to a year, making it impossible for the Islamic Republic to sell products abroad and buy the imports it needs to continue its manufacturing sector and run public services, the European diplomat said.

The New York Times’ Rick Gladstone reported:

Western economic sanctions imposed on Iran over its disputed nuclear program have severely depressed the value of its national currency, the rial, causing higher inflation and forcing Iranians to carry ever-fatter wads of bank notes to buy everyday items. But the sanctions have also presented a new complication to Iran’s banking authorities: they may not be able to print enough money.

The Washington Post reported:

Stringent new sanctions imposed by the United States and European Union against Iran have curbed the country’s oil exports by more than 1 million barrels a day, according to new data released by the International Energy Agency. The IEA data, released late last week as part of a little-noticed annual report, paint the first detailed picture of how hard the sanctions have hit Iran: The agency estimates that the country’s oil exports have fallen by almost a third in the past three months, representing a substantial loss of income for the government.

The Jerusalem Post also released a report on Iran’s failing auto industry:

As Iran’s economy continues to feel the effects of ever-toughening sanctions, the country’s conservative media continued this week to report a dramatic downturn in the Islamic Republic’s automotive industry, the country’s second most lucrative after oil and gas.

Conservative news site Shafaf News - close to Tehran Mayor Mohammad Baqer Qalibaf - reported Tuesday that the Iran’s currency crisis has seriously affected the domestic automotive market, despite promises by the government to control the economy.

The Jerusalem Post also reported that a senior Iranian lawmaker publicly acknowledged the negative effects that sanctions are having on the economy.

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