Iran’s currency crisis will probably deepen the Islamic republic’s economic contraction this year by more than the International Monetary Fund had estimated, the fund’s Middle East chief said.
The IMF had forecast the Iranian economy would shrink 0.9 percent this year, while inflation would surge to a four-year high of 25.2 percent. The predictions are based on data from before the rial’s slump, which “will likely have a further negative impact on economic outcomes in the coming year,” Masood Ahmed, head of the Middle East and Central Asia department, said in an interview in Dubai yesterday.
The Iranian rial has dropped about 40 percent against the dollar since August, and while the central bank’s inflation rate for September was 24 percent, economists say the measure may be three times higher.
The rial has tumbled about 40 percent against the dollar since August as the U.S. and the European Union starve the country of foreign currency by blocking sales of oil, its main export.
Crude output has plunged to the lowest in more than two decades.
http://www.bloomberg.com/news/2012-...risis-likely-to-worsen-gdp-shrinkage-imf.html
