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Esfandyar Batmanghelidj

Iran’s Economic Resiliency Makes Talks More Likely

The Islamic Republic wants to negotiate from a position of strength. A rebound in 2020 might be just the ticket.

Rial politik may bring Iran to the negotiation table.

Rial politik may bring Iran to the negotiation table.

Photographer: Ali Mohammadi/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.