If the revised International Monetary Fund (IMF) forecast of GDP growth for Iran, -6.0 percent, is to be believed, the impact from U.S. sanctions will be relatively moderate, alarmist reports notwithstanding.
This would be a smaller drop than that which European countries like Greece, Italy and Spain experienced after the 2008 global financial crisis. In this case, deep recession rather than economic collapse is a more accurate way to describe what Iran faces in the next year or two.
Iran’s economy depends heavily on oil. Although oil accounts for less than 20 percent of the GDP, in the absence of a plan to restructure the economy away from oil, its loss can be more serious that its share of GDP indicates.