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U.S. sanctions force Iran's economy into recession: IMF report

International Monetary Fund (IMF) managing director Christine Lagarde
International Monetary Fund (IMF) managing director Christine Lagarde

A Monday report from the International Monetary Fund (IMF) estimated Iran’s economy has now entered recession due to new U.S. sanctions.

The World Economic Outlook report, issued by the IMF, predicts that Iran’s economy will contract by 1.5 percent in 2018, with the trend continuing and increasing in 2019, shrinking by 3.5 percent.

“Prospects for 2018–19 were marked down sharply for Iran, reflecting the impact of the reinstatement of U.S. sanctions,” the report said.

“Saudi Arabia’s spare capacity is shrinking and US sanctions against Iran will both weigh on Iran’s oil production prospects in the medium term and reduce Iran’s crude exports in the short term, requiring others with spare production capacity to step in.”

The report, published twice a year in April and October, is widely read by both public and private sectors globally for the IMF's assessment of the world economy.

Trump withdrew the U.S. from the 2015 Joint Comprehensive Plan of Action (known commonly as the Iran nuclear deal) in May, after consistently criticizing the international pact for years. In August, Washington moved to officially reimpose the first round of sanctions against Iran, while the second patch will come into effect in November.