Can Iran economically sustain a protracted war?
Iran’s fragile economy is under siege and at risk of significant economic deteoriation in case of a protracted conflict.
The country’s projected growth for this year - which the International Monetary Fund’s October placed at 1.1% last October - has now plunged into the red territory. The fund foresees Iran’s GDP to contract by 6.1% this year, together with an upward inflation revision of over 13 percentage points.
Grim estimates and prophecies are pouring in from multiple quarters. Official figures suggest that the country has suffered around $270 billion in direct and indirect losses in the first few weeks of the conflict with the US and Israel – more than half of its 2024 GDP. Iran’s central bank has reportedly estimated that reconstructing the war-ravaged economy could take more than a decade.
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