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Iran Adapts to Economic Sanctions

(Institute for National Security Studies-Tel Aviv University) Moshe Efrat - Despite the many negative economic indicators and the devaluation of the Iranian currency, the steep rise of the Tehran stock exchange continued in 2012 at a real rate of more than 15%, and at more than 22% in January-June 2013. Moreover, since early 2012 the construction and real estate sector has boomed, with a significant rise in real prices. In addition, as a result of the limits imposed on imports, various industrial plants have experienced significant recovery. Iran's enormous income from oil exports over the period 2007-2012 netted $500 billion. The vast majority of Iranian annual foreign trade is conducted with Asia and the Far East, with only 20% conducted with the West. On May 20, 2013, the IMF estimated that Iran will amass a $25 billion surplus in its current account. In addition, after two years of especially harsh Western sanctions, Iran will, in late 2013 or early 2014, still have $79 billion in foreign currency and gold reserves. According to the IMF, in 2014 Iran will experience renewed real growth at least at a 1.1% rate. Dr. Moshe Efrat is the former head of the economic branch in Israel Military Intelligence's research division and a senior research fellow at the London School of Economics.
2013-08-23 00:00:00
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