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.



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.