Iran’s economy is expected to shrink by 1.5 percent in 2018 and by another 3.6 percent in 2019, the International Monetary Fund (IMF) said in the October update of its World Economic Outlook, heavily downgrading Iran’s growth prospects with the return of the US sanctions and upgrading forecasts for the Gulf economy.
It said the Saudi economy is expected to grow by 2.2 percent in 2018 and 2.4 percent next year, raising previous projections by 0.5 percent.
The IMF said Iran's oil-driven economy is expected to shrink as a result of declining oil exports.
In May, before US President Donald Trump announced that he was reinstating sanctions against Tehran, the IMF had projected Iran's economy would grow by 4 percent in 2018 and 2019.
The IMF said the Iranian economy would return to modest positive growth in 2020-2030”.
Trump withdrew the United States from the 2015 nuclear deal between Iran and world powers in May, and his administration reimposed a round of sanctions on the Islamic republic in July.
It now projects the MENA region to grow by 2.0 percent this year and 2.5 percent in 2019, 1.2 percent and 1.1 percent lower, respectively, than it forecast in April.
Iranian crude exports, which reach some 2.5 million barrels per day normally, have plunged by over half a million bpd and are expected to dive further when expanded sanctions on oil take effect next month, depriving Tehran of its main source of income.
