#Iran’s Economic Resiliency Makes Talks More Likely - Bloomberg

Iran’s Economic Resiliency Makes Talks More Likely - Bloomberg:

The International Monetary Fund has revised downward its projections for Iran’s economy this year, predicting a 9.5% contraction, as against its previous projection of a 6% shrinkage. It will be the economy’s worst performance since 1984, when Iran was mired in a war with Iraq.

At first glance, this seems to support the Trump administration’s claims that its “maximum pressure” sanctions campaign is bringing the Iranian economy to the brink of collapse. But this view is challenged by the IMF’s projection that the decline will halt in 2020 when Iran’s economy will rebound to zero growth—despite the sanctions.

A closer examination reveals an economic recovery is already underway, as stability returns to consumer prices, manufacturing, trade, and the Iranian currency. Somewhat counterintuitively, this could improve the prospects of talks between Iran and the U.S. A stable economy may reassure the Islamic Republic that it can negotiate from a position of some strength.