Iranian inflation will exceed 50% in 2023: economist

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An economist says that if Tehran fails to revive the 2015 nuclear deal, the country’s economy will suffer more and see inflation of more than 50% next year.

Fararu, which is a pro-reform website, interviewed Iranian economist Vahid Shaqaqi Shahri who said that if the regime fails to reach an agreement with the West over its controversial nuclear program and revive the JCPOA, the country could experience higher inflation which could bring its economy growth to zero in 2023.

Shaqaqi told Fararu that while Iran’s neighbours, including Turkey and Saudi Arabia, have seen double-digit growth in recent years, the Islamic Republic’s economy has shrunk in the face of sanctions and rising soaring inflation.

Iran’s economy is almost entirely state-run, and the country’s policymakers show no flexibility or interest in reform, even as many warn the system needs drastic changes. The average annual inflation in the sixth month of the current Iranian year reached 42.1%, the Iranian Statistical Center said in a report in September.

As the streets of many cities have turned into scenes of anti-government protests since mid-September in the latest wave of anger against the clerical regime’s totalitarian approach to cultural, political and economic issues, it does not seem there be no glimmer of hope for reforms by the authorities.

The people currently taking their anger out on the Islamic Republic in the streets and demanding regime change are fed up with the economic pressure and see a bleak future for themselves; however, the government continues to crack down, showing no interest in reforms.

Vahid Shaqaqi Shahri, Iranian economist

In his Saturday interview with the Fararu news site, Shaqaqi said “Iran’s economy no longer has the capacity to collapse any further.”

This university professor also mentioned a recent report from the International Monetary Fund (IMF) which predicted high energy and food prices and tougher economic conditions in 2023, warning that without “economic reforms, empowerment of the private sector, development of non-oil exports and increased investment”, Iran could see a more crippled economy next year.

Earlier this week, the IMF reported that with “Russia’s invasion of Ukraine and the ongoing COVID-19 pandemic weighing heavily on the outlook, global growth is expected to slow to 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023. .”

This Iranian expert further noted that there are two other possible scenarios for the Iranian economy next year. “The optimistic scenario is that the JCPOA will be revived, and with the lifting of sanctions, the inflation rate will decrease to 20% and economic growth of 5% could be achieved.”

With a slight increase in oil sales, Iran’s economy gained around $40 billion from non-oil exports and imported $45 billion worth of goods, Shaqaqi said, adding that the country had reached economic growth of 2 to 3%, as predicted by the International Monetary Fund. However, he said, “if the conditions remain the same and the sanctions are not increased”, economic growth of 1 or 2% as well as inflation of 40% can also be observed for Iran. in 2023.

The Iranian economy is mainly influenced by political power. The government believes that if it loses control over the economy, it will lose its political authority.

A notable example is the Revolutionary Guard which plays a very important role in the economy through monopolistic practices. Several cases of high-profile corruption and embezzlement have undermined popular confidence in the regime.

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