Israel Matzav

Iran sanctions working great, economy grows faster than US economy

In Iran, those sanctions that are designed to stop the country's nuclear program are going just great according to the International Monetary Fund. The economy grew at a rate of 3.2% in 2010-11. That's a better rate than the United States....

The International Monetary Fund gave a rosy portrayal of Iran's economy in a report issued Wednesday, saying it grew by 3.2 % in 2011, contradicting its earlier assessment and surprising Iran analysts who contend that the economy is shrinking.

The new IMF report is based mainly on official Iranian data, independent economists said—rather than on a second set of economic statistics in Iran that is made by independent economists. The IMF's April regional report on the Middle East and Central Asia, which was based on the independent analyses, predicted a 0% growth rate for Iran.

The country's central bank, a government entity, hasn't issued an economic growth report since 2008, prompting criticism from Iranian lawmakers recently that the bank was hiding the data under the order of President Mahmoud Ahmadinejad.

Iran had blasted the April report, calling it "politicized" and saying the IMF was acting under Western influence. After the criticism, the IMF sent a group of experts to Iran to review its report and "correct" it, Iran's deputy economy minister Mohamad Reza Farzin said in June after part of the new report was released.

The IMF wasn't available for comment. The fund didn't say how much of the new report was based on official statistics and how much it had obtained independently.

The new report surprised Iran analysts, who said these figures didn't reflect the dire reality of Iran's economy, weighed down by strict international sanctions, mismanagement and inefficiencies. Economists inside and outside of Iran, as well as European governments, have also questioned the accuracy of the IMF's economic data for Iran. One European official said, "We think they're overly optimistic."

"IMF's new report is a big puzzle," said Paris-based economist and Iran expert Fereydoun Khavand, saying it "relies on figures from the Islamic Republic which are even disputed inside the country."

The report said the country's economic growth has rebounded from a cyclical downturn in 2008-09, "spurred by a recovery in agriculture production, and higher oil prices." Even so, the gross domestic product growth of 3.2% in 2010-11 was slightly lower than the 3.5% recorded in 2009-10, according to the IMF.

By comparison, here's a chart showing US GDP growth from January 2009 to June 2011.



Someone please remind me again which country is under sanctions.

What could go wrong?

Labels: GDP, International Monetary Fund, Iran, Iran sanctions regime, United States

posted by Carl in Jerusalem @ 5:43 PM