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Tale of Two Economies: IMF Tallies Up Sanctions Wreckage in Iran

  • Fund expects Iran’s economy to contract this year and next
  • Iran needs oil prices close to $100 a barrel to balance budget
A gas flame burns from a pipe close to an offshore oil platform in the Persian Gulf's Salman Oil Field, near Lavan island, Iran.

A gas flame burns from a pipe close to an offshore oil platform in the Persian Gulf's Salman Oil Field, near Lavan island, Iran.

Photographer: Ali Mohammadi/Bloomberg

The re-imposition of U.S. sanctions on Iran’s oil exports is undoing every assumption the International Monetary Fund had about its economy.

Instead of a growth spurt the IMF anticipated only months ago, it now projects a recession starting in 2018, a deepening fiscal shortfall and inflation more than tripling from last year, according to its regional economic outlook released on Tuesday.