IMF: Iran Inflation Could Hit 40 Percent

Iran’s economy is expected to shrink for the second consecutive year, said the IMF. (AP)
Iran’s economy is expected to shrink for the second consecutive year, said the IMF. (AP)
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IMF: Iran Inflation Could Hit 40 Percent

Iran’s economy is expected to shrink for the second consecutive year, said the IMF. (AP)
Iran’s economy is expected to shrink for the second consecutive year, said the IMF. (AP)

Iran’s economy is expected to shrink for the second consecutive year and inflation could reach 40 percent, an International Monetary Fund senior official said, as the country copes with the impact of tighter sanctions imposed by the United States.

Washington, which re-imposed sanctions against Iran’s oil exports last November, this month demanded buyers of Iranian oil to stop purchases by May or face sanctions, ending six months of waivers which allowed Iran’s eight biggest buyers to continue importing limited volumes.

Iran’s economy shrank by 3.9 percent last year, according to IMF estimates, and is expected to shrink by 6 percent in 2019, Jihad Azour, director of the IMF’s Middle East and Central Asia department, told Reuters adding, however, that the projection preceded the latest elimination of waivers.

“Clearly the re-imposition of sanctions and the removal of the waivers will have additional negative impact on the Iranian economy both in terms of growth and in terms of inflation, where inflation could reach 40 percent or even more this year,” he said.

US sanctions against Iran have denied its government more than $10 billion in oil revenue, a US official said earlier this month.

The Iranian currency, the rial, lost more than 60 percent last year, disrupting Iran’s foreign trade and boosting annual inflation.

The Iranian rial official rate is set at 42,000 rials to the US dollar, but its market rate stood at around 144,000 against the US dollar on Sunday, according to foreign exchange website Bonbast.com.

Iran should work to eliminate the gap that currently exists between the market exchange rate and the official exchange rate, said Azour.

“By aligning the market and official rates this will help tame and control inflation and will reduce pressure on the exchange rate.”

The currency’s slide, from levels around 43,000 at the end of last year, has eroded the value of ordinary Iranians’ savings, triggering panic buying of dollars.

The weak currency and galloping inflation have been a complaint of sporadic street protests since late 2017.



Ukraine’s Zelenskiy Says Latest Phone Call with Trump His Most Productive Yet

Ukraine's President Volodymyr Zelenskiy attends a press conference in the garden at Marselisborg Castle on the occasion of Denmark taking over the EU presidency, in Aarhus, Denmark, July 3, 2025. (Henning Bagger/Ritzau Scanpix/via Reuters)
Ukraine's President Volodymyr Zelenskiy attends a press conference in the garden at Marselisborg Castle on the occasion of Denmark taking over the EU presidency, in Aarhus, Denmark, July 3, 2025. (Henning Bagger/Ritzau Scanpix/via Reuters)
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Ukraine’s Zelenskiy Says Latest Phone Call with Trump His Most Productive Yet

Ukraine's President Volodymyr Zelenskiy attends a press conference in the garden at Marselisborg Castle on the occasion of Denmark taking over the EU presidency, in Aarhus, Denmark, July 3, 2025. (Henning Bagger/Ritzau Scanpix/via Reuters)
Ukraine's President Volodymyr Zelenskiy attends a press conference in the garden at Marselisborg Castle on the occasion of Denmark taking over the EU presidency, in Aarhus, Denmark, July 3, 2025. (Henning Bagger/Ritzau Scanpix/via Reuters)

Ukrainian President Volodymyr Zelenskiy said on Saturday that his latest conversation with US President Donald Trump this week was the best and "most productive" he has had to date.

"Regarding the conversation with the president of the United States, which took place a day earlier, it was probably the best conversation we have had during this whole time, the most productive," Zelenskiy said in his nightly video address.

"We discussed air defense issues and I'm grateful for the willingness to help. The Patriot system is precisely the key to protection against ballistic threats."

Zelenskiy said the two leaders had discussed "several other important matters" that officials from the two sides would be considering in forthcoming meetings.

Trump told reporters on Friday that he had a good call with Zelenskiy and restated his disappointment at a conversation with Russian President Vladimir Putin over what he said was Moscow's lack of willingness to work toward a ceasefire.

Asked whether the United States would agree to supply more Patriot missiles to Ukraine, as requested by Zelenskiy, Trump said: "They're going to need them for defense... They're going to need something because they're being hit pretty hard."

Russia has intensified air attacks on Kyiv and other cities in recent weeks. Moscow's forces launched the largest drone attack of the 40-month-old war on the Ukrainian capital hours after Trump's conversation with Putin on Thursday.