Iran’s economy is likely to contract this year and next, heading into a recession on the back of sharp declines in oil exports and a further slump in already-low foreign investment inflows as the US reimposes sanctions on Tehran.
After steadily growing in 2017, economic activity in Iran is forecast to contract by 1.5 per cent and 3.6 per cent in 2018-19, the World Bank said in its World Economic Outlook released on Thursday. Fitch Solutions, a part of Fitch Group, estimates Iranian gross domestic product to contract by 4.3 per cent in 2019 and expand beyond that time frame - albeit at a modest rate.
“Our core view is for the re-imposition of US nuclear-related sanctions to cause a sharp slowdown in the Iranian economy in 2018 and trigger a recession in 2019, as exports and investment inflows decline, and rising inflation and high unemployment weigh on consumption,” the Fitch report said.
Weakness of the Iranian rial and fast-rising inflation will also weigh on domestic investment and consumption, both the World bank and Fitch Solutions’ reports noted.
The World Bank expects the annual inflation rate to exceed 30 per cent on average in 2019, up from 9.6 per cent last year. Although the depreciation of the currency could help improve non-oil exports, it will not be enough to offset the loss of oil exports, which still account for 40 per cent of the government’s revenues and export receipts.
Earlier this week Fitch estimated inflation in Iran to average 33.2 per cent in the 2018-2019 financial year that started in April, nearly double its previous forecast of 17 per cent. It expects the rial to continue to weaken further on the back of continued expansion of Iran’s monetary base.
____________________
WATCH: Tim Marshall on Iran sanctions
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The rising cost of living led to public dissent and mass protests in several Iranian cities earlier this year.
US sanctions on Iranian oil imports will come into force in early November, however, crude exports dropped off sharply over August and September in the lead-up to sanctions, Fitch Solutions noted, citing tanker tracking data.
“This trend is already playing out even before the [sanctions] activation date, as importers of Iranian oil attempt to either comply or qualify for limited sanctions waivers,” Fitch Solutions noted.
The state of Iran’s economy is worsening as the deadline of re-imposition of sanctions by US over its nuclear programme nears. The sharp fall in the value of the Iranian currency in the unofficial market, inflationary pressures, and high unemployment rates, especially among youth - estimated at 30 percent in 2018 by the World Bank and International Labor Organization - could lead to stagflation. The financial woes are compounded by the structural weaknesses and deteriorating asset quality of Iran’s financial institutions, which are unable to access the international financial system.
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Read more:
Iranian inflation set to rise sharply as US sanctions deadline approaches
Iran central bank authorised to intervene in foreign exchange market to defend rial
Mike Pompeo heads talks to counter 'malign' Iran
US to close consulate in Basra over Iran security risk
____________________
Iran's rial has hit multiple record lows this year against the US dollar. The demand for the dollar is stoked by concerns that the impact of US sanctions would be felt beyond the country’s crude shipments and will affect Iran’s broader export sector.
Last month, Iran authorised the central bank to intervene in the foreign exchange market in defence of its currency. A top government body, headed by President Hassan Rouhani and the heads of parliament and the judiciary, "gave the central bank governor the necessary authority to intervene in the foreign exchange market and to manage it", Reuters cited state TV as saying at the time.
“Declining foreign exchange inflows and rising money supply growth will fuel depreciation of the rial - which has already suffered severe losses in the ‘free market’ over the year-to-date and send inflation higher,” the Fitch report said. “Coupled with very limited credit availability this will constrain private domestic investment and consumption.”
Bombshell
Director: Jay Roach
Stars: Nicole Kidman, Charlize Theron, Margot Robbie
Four out of five stars
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
On sale: now
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Ogram%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Karim%20Kouatly%20and%20Shafiq%20Khartabil%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%2C%20UAE%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20On-demand%20staffing%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%2050%3Cbr%3E%3Cstrong%3EFunding%3A%20%3C%2Fstrong%3EMore%20than%20%244%20million%3Cbr%3E%3Cstrong%3EFunding%20round%3A%3C%2Fstrong%3E%20Series%20A%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EGlobal%20Ventures%2C%20Aditum%20and%20Oraseya%20Capital%3Cbr%3E%3C%2Fp%3E%0A
Key features of new policy
Pupils to learn coding and other vocational skills from Grade 6
Exams to test critical thinking and application of knowledge
A new National Assessment Centre, PARAKH (Performance, Assessment, Review and Analysis for Holistic Development) will form the standard for schools
Schools to implement online system to encouraging transparency and accountability
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
if you go
The flights
Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.
The hotels
Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.
When to visit
March-May and September-November
Visas
Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.
Killing of Qassem Suleimani
MATCH INFO
Uefa Champions League semi-final, first leg
Tottenham 0-1 Ajax, Tuesday
Second leg
Ajax v Tottenham, Wednesday, May 8, 11pm
Game is on BeIN Sports
England-South Africa Test series
1st Test England win by 211 runs at Lord's, London
2nd Test South Africa win by 340 runs at Trent Bridge, Nottingham
3rd Test July 27-31 at The Oval, London
4th Test August 4-8 at Old Trafford, Manchester
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Tales of Yusuf Tadros
Adel Esmat (translated by Mandy McClure)
Hoopoe
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
MATCH DETAILS
Barcelona 0
Slavia Prague 0
Where to buy
Limited-edition art prints of The Sofa Series: Sultani can be acquired from Reem El Mutwalli at www.reemelmutwalli.com
INDIA'S%20TOP%20INFLUENCERS
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The five pillars of Islam
UAE currency: the story behind the money in your pockets
Pathaan
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Siddharth%20Anand%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Shah%20Rukh%20Khan%2C%20Deepika%20Padukone%2C%20John%20Abraham%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
UAE rugby season
FIXTURES
West Asia Premiership
Dubai Hurricanes v Dubai Knights Eagles
Dubai Tigers v Bahrain
Jebel Ali Dragons v Abu Dhabi Harlequins
UAE Division 1
Dubai Sharks v Dubai Hurricanes II
Al Ain Amblers v Dubai Knights Eagles II
Dubai Tigers II v Abu Dhabi Saracens
Jebel Ali Dragons II v Abu Dhabi Harlequins II
Sharjah Wanderers v Dubai Exiles II
LAST SEASON
West Asia Premiership
Winners – Bahrain
Runners-up – Dubai Exiles
UAE Premiership
Winners – Abu Dhabi Harlequins
Runners-up – Jebel Ali Dragons
Dubai Rugby Sevens
Winners – Dubai Hurricanes
Runners-up – Abu Dhabi Harlequins
UAE Conference
Winners – Dubai Tigers
Runners-up – Al Ain Amblers
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Carzaty%2C%20now%20Kavak%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ELaunch%20year%3A%20%3C%2Fstrong%3ECarzaty%20launched%20in%202018%2C%20Kavak%20in%20the%20GCC%20launched%20in%202022%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%20140%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Automotive%3Cbr%3E%3Cstrong%3EFunding%3A%20%3C%2Fstrong%3ECarzaty%20raised%20%246m%20in%20equity%20and%20%244m%20in%20debt%3B%20Kavak%20plans%20%24130m%20investment%20in%20the%20GCC%3C%2Fp%3E%0A
THE%20SWIMMERS
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THE BIO: Martin Van Almsick
Hometown: Cologne, Germany
Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)
Favourite dessert: Umm Ali with dark camel milk chocolate flakes
Favourite hobby: Football
Breakfast routine: a tall glass of camel milk
Sholto Byrnes on Myanmar politics
Killing of Qassem Suleimani
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
