Posted on 05/20/2018 1:37:48 AM PDT by TigerLikesRooster
Doomed? Why Iran's Economic Mess Will Get Worse
Simon Constable
The matter at hand is the decision earlier this month by the Trump administration not to certify the so-called nuclear deal, and that means Iran will soon be subject to harsh U.S. sanctions. Overall the result will be a squeezed economy.
Current situation
Even the latest official statistics for the Iranian economy don't look good. The unemployment rate stands at 11.9% and the inflation rate at 8.3%, according to TradingEconomics.com. However, at least some of the government figures may be more aspirational than actual.
Take, for instance, the inflation rate. Steve Hanke, professor of applied economics at Johns Hopkins University, makes a regular and sophisticated estimate of how much the price level is moving within the country. For May 8, he estimates Iranian inflation at 71.7%.
Hanke also says the state now has the third highest misery index ranking. The index is the percentage unemployment rate plus the percentage inflation rate. Higher index numbers mean more misery for the population.
While these figures don't exactly sound like the Iranian economy is doing well. Things will be far worse in the coming months.
What's in store and why?
It is true that the European partners to the Iranian nuclear the deal, such as Germany and the U.K. are trying to salvage some form of continued arrangement with Tehran, Iran's seat of government. However, that matters little because few significant corporations would want to spark the ire of the U.S. administration in a way that might cut off their access to the lucrative U.S. market. Remember, that in capitalist economies the government typically doesn't buy nearly as much as do corporations. It will be the latter that will shun doing business with Tehran.
(Excerpt) Read more at thebaghdadpost.com ...
aaahh maersk. that could be a big deal
Good post
Bump
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