After 4 years of US sanctions, what happened to the Iranian economy?

While nuclear negotiations between the United States and Iran remain stalled, sanctions continue to wreak havoc, causing inflation to rise, GDP to fall and prices to rise.

In a report published by the British "Middle East Eye" website, the writers Omar Al-Farouq and Rida Khawastah said that after several months of negotiations aimed at resuming the Iranian nuclear agreement, the talks stalled with fears that they might collapse completely, and throughout that time, they continued International sanctions and Iranian citizens bore the brunt;

The economic shocks made their daily lives more difficult.

Given its inclusion for years on the financial blacklist by the international community, Iran has learned to adapt to this situation, but the steady inflation, the devaluation of the Iranian rial, and the decline in GDP generated a severe crisis.

“Iranian families are being forced to change their grocery lists, and many Iranians are consuming less meat, and are even concerned about the cost of staples like rice and bread,” said Esviander Batmanglij, a visiting fellow at the European Council on Foreign Relations. Iran is not facing a real hunger crisis, but the decline in purchasing power represents a humanitarian crisis."

"It must be recognized that the decline in the livelihoods and well-being of ordinary people is evidence of the failure of the policy aimed at reducing human harm," Batmanjlig added.

Iran's GDP has grown from 2010 to 2012, followed by a steady decline as a result of international sanctions on Iranian oil exports.

In 2016, this output rose slightly as a result of the implementation of the Iran nuclear deal, but decreased significantly once former US President Donald Trump withdrew from the deal two years later.

By 2020, the country's gross domestic product was about a third of what it was in 2012, and while prices in Iran were generally rising, average incomes in the country were falling;

This made the cost of basic commodities such as food and medicine very expensive.

Impact of US sanctions

In this regard, Batmanglij said that "the impact of sanctions on the Iranian currency and the high inflation rates recorded by Iran during the sanctions period increased the cost of all kinds of goods, while consumer prices increased by about 40% compared to last year, and this means a decrease in the purchasing power of millions of Iranian families." .

Ali - a 26-year-old Iranian citizen living in Tehran - says that US sanctions have not only doubled the prices of basic goods and services, but have also made it difficult to find some medicines over the past few years.

While the United States argues that it provides humanitarian exemptions to allow medicines into the country, rights groups have said the imposition of secondary sanctions has created fears among some companies about operating in Iran, impeding access to certain types of medicines.

The authors note that even when certain types of drugs are available, the country's inflation has made some of them prohibitively expensive for the average Iranian.

Therefore, even with medicines available on pharmacies shelves, sanctions prevent Iranians from obtaining them.

Inflation is one of the most repercussions of sanctions imposed on Iran that does not receive sufficient coverage. In the latter's report, Batmanglij highlighted the negative impact of sanctions on the level of inflation in the country.

For example, inflation in the US grabbed the headlines this year after rising 8.5% over the past several months, forcing a large segment of Americans to rely entirely on their salaries to make ends meet.

In contrast, Iranians have been living under inflation for a decade, and with the ongoing talks futile, many fear inflation will continue without end.

"Many people have lost their jobs as a result of the re-imposition of US sanctions," says Aida, 38, who is the director of a company designing conference rooms and cinemas.

But even if the US agrees to the nuclear deal (known as the Joint Comprehensive Plan of Action) and lifts sanctions immediately, it will take at least 6-8 months for conditions to improve for the Iranians to import the goods they need or for the government to sell its oil and collect the revenue .

Beeman, 24, who works in a grocery store, states that his family sometimes cannot cover all its expenses amid the daily rise in prices, so all four members of his family - including his younger sister - must work between 8 and 10 hours a day to be able to live even if With income below average.