Iran’s Economy Can’t Afford Further Military Escalation

Sign up here to receive the Davos Diary, a special daily newsletter that will run from Jan. 20-24.

Iran’s economy has been squeezed by U.S. sanctions, suggesting it can’t afford further military escalation, according to Bloomberg Economics. The country is in recession and sanctions reduced oil GDP by more than a quarter in 2019. The loss of petrodollars and the blow to sentiment have also hit non-oil GDP, where an expansion of almost 5% in 2017 turned into a contraction of more than 4% in each of the last two years.