Iran Economy to Shrink 9.5% this Year amid Tighter US Sanctions, Says IMF

File photo of Iranian women at the Tajrish bazaar in northern Tehran. (AFP)
File photo of Iranian women at the Tajrish bazaar in northern Tehran. (AFP)
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Iran Economy to Shrink 9.5% this Year amid Tighter US Sanctions, Says IMF

File photo of Iranian women at the Tajrish bazaar in northern Tehran. (AFP)
File photo of Iranian women at the Tajrish bazaar in northern Tehran. (AFP)

Iran’s economy is expected to shrink by 9.5% this year, the International Monetary Fund (IMF) said, down from a previous estimate of a 6% contraction, as the country feels the impact of tighter US sanctions.

The IMF forecasts, published on Tuesday in the fund’s World Economic Outlook report, are not far from estimates given last week by the World Bank, which said the Iranian economy by the end of the 2019/20 financial year would be 90% smaller than it was just two years ago.

Iran, a large oil producer, saw its oil revenues surge after a 2015 nuclear pact agreed with six major powers that ended a sanctions regime imposed three years earlier over its disputed nuclear program.

But new sanctions brought in after US President Donald Trump withdrew from that deal in 2018 are the most painful imposed by Washington, targeting nearly all sectors of Iran’s economy.

The IMF had previously forecast Iran’s economy to shrink by 6% this year, but that estimate preceded Washington’s decision in April to end six months of waivers which had allowed Iran’s eight biggest oil buyers to continue importing limited volumes.

The fund said Iran, along with other emerging market economies, continues to experience “very severe macroeconomic distress.”

A drop in the Iranian currency following the re-imposition of sanctions has disrupted Iran’s foreign trade and boosted annual inflation, which the IMF forecasts at 35.7% this year.

The Iranian rial official rate is set at 42,000 rials to the US dollar, but its market rate stood at around 115,000 against the dollar on Tuesday, according to foreign exchange website Bonbast.com.



27 Inmates are Still at Large Following an Israeli Airstrike during the 12-day War, Iran says

In this photo taken Tuesday, June 24, 2025, rescuers search through the rubble of a damaged section of Evin Prison following an Israeli strike the day before, in Tehran, Iran. (AP Photo/Mostafa Roudaki/Mizan News Agency)
In this photo taken Tuesday, June 24, 2025, rescuers search through the rubble of a damaged section of Evin Prison following an Israeli strike the day before, in Tehran, Iran. (AP Photo/Mostafa Roudaki/Mizan News Agency)
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27 Inmates are Still at Large Following an Israeli Airstrike during the 12-day War, Iran says

In this photo taken Tuesday, June 24, 2025, rescuers search through the rubble of a damaged section of Evin Prison following an Israeli strike the day before, in Tehran, Iran. (AP Photo/Mostafa Roudaki/Mizan News Agency)
In this photo taken Tuesday, June 24, 2025, rescuers search through the rubble of a damaged section of Evin Prison following an Israeli strike the day before, in Tehran, Iran. (AP Photo/Mostafa Roudaki/Mizan News Agency)

Iran said Tuesday 27 inmates were still at large after an Israeli airstrike last month targeted Evin prison in the north of the capital, Tehran, local media reported.

The airstrikes were part of Israel’s 12-day bombardment of Iran that killed about 1,100 people. while 28 were left dead in Israel in Iranian retaliatory strikes, The Associated Press said.

Judiciary’s news website, Mizanonline, quoted spokesman Asghar Jahangir as saying 75 prisoners had escaped following the strike, of which 48 were either recaptured or voluntarily returned. He said authorities will detain the others if they don't hand themselves over.

Jahangir said the escapees were prisoners doing time for minor offenses.

Iranian officials said the Israeli strike killed 71 people, but local media reported earlier in July that 80 were left dead at the time, including prison staff, soldiers, inmates and visiting family members. Authorities also said five inmates died.

It’s unclear why Israel targeted the prison. The Israeli Defense Ministry had said that 50 aircraft dropped 100 munitions on military targets “based on high-quality and accurate intelligence from the Intelligence Branch.”

The New York-based Center for Human Rights had criticized Israel for striking the prison, seen as a symbol of repression of any opposition, saying it violated the principle of distinction between civilian and military targets.