Sourced fact
The News
The Iranian government has announced new steps to counter the economic pressures resulting from US sanctions and the war with Israel. President Mousaddegh Besheshkan stated that the US and Israel aim to cut off the "arteries of vitality" of the country to pressure the Iranian people. Since the war began in February, the Iranian economy has been severely impacted, with economic damages estimated at 270 billion dollars. The value of the Iranian currency has reached record lows, and the GDP has contracted by 10% due to a decline in energy exports.
According to Maram Ashrafi's analysis from the Boroujerdi and Pizari Foundation, trade restrictions have led to a shortage of raw materials used in the production of basic goods such as vegetable oils, leading to price hikes. Sanctions have also affected wheat and grain imports, with ships using the Caspian Sea port limited in their cargo capacity compared to ships using main maritime routes.
Recently, Iran's Ministry of Planning and Budget presented a package of measures to address the economic crisis, but details have not yet been disclosed. Besheshkan indicated that the government is working on forming a committee to coordinate new economic measures. The committee aims to help the country overcome economic challenges in a more organized and cost-effective manner. The government will focus on supporting vulnerable segments of society, such as women-headed households. Besheshkan also called for the implementation of a "Sunday without cars" day to encourage energy conservation.
Despite being a major producer of oil and gas, Iran has faced shortages of gasoline and power outages since the beginning of the war. Economist Saeed Lalezar views the government's delayed response to economic challenges as unjustified but believes that focusing on reducing prices of essential goods would be beneficial. However, Lalezar notes that the country has adequate reserves of essential goods and can rely on alternative trade and supply routes.
Analysis & context
Analysis & Context
Analytically, Iran's recent steps reflect its continued efforts to counter the economic pressures imposed by the US. These measures come in the context of deteriorating relations between the two countries since the US withdrawal from the nuclear deal in 2018.
In the broader context, Iran faces significant economic challenges due to international sanctions that limit its ability to engage in global trade. These sanctions have led to a decline in the value of the local currency and an increase in the prices of essential goods, exacerbating the suffering of the population.
It is worth noting that Iran relies heavily on its natural resources, particularly oil and gas, to support its economy. However, sanctions and trade restrictions limit its ability to benefit from these resources.
Finally, some experts believe that Iran needs long-term plans to enhance its economic independence and reduce its reliance on external trade, even in the face of ongoing sanctions.
