Donald Trump, uncertainty, and Iran’s economy4 min read 15 Oct 2017, 11:38 PM IST
Iran's economic health continues to be inextricably linked to the domestic, regional and international political forces in play
The 2015 Joint Comprehensive Plan of Action (JCPOA) signed by Iran and the P5+1 (the US, the UK, France, Russia, China plus Germany) on behalf of the international community signalled a shift in international affairs, and coincided with optimism for the Iranian economy. The agreement, which alleviated sanctions levied against Iran, in exchange for a scaling back of the Iranian nuclear programme (the reason for said sanctions), conveyed the P5+1’s resolve in addressing the nuclear security threat and, of course, the detrimental impact the sanctions were having on Iran. In gross domestic product (GDP) terms, the 2013 interim Joint Plan of Action (JPA) negotiations led the Iranian economy to go from a 6.6% GDP contraction rate in 2012, to 4.3% GDP growth rate in 2014, with inflation (measured using the consumer price index) almost halving from 30.5% to 15.6% in the same period, demonstrating the positive impact of the negotiations. That being said, more recent developments have threatened to not only reverse these positive economic indicators, but also threaten the JCPOA altogether. Indeed, US President Donald Trump’s questioning of the deal has cast a shadow over the survivability of the deal, which in turn threatens to negate Iran’s economic recovery.