Rouhani: Iran facing toughest economic crisis in 40 years

Iranian President Hassan Rouhani has said that Iran is facing its toughest economic situation in 40 years and that the United States is to blame.

The country has witnessed its currency plummet, prices soar and growth forecasts fall since the US renewed economic sanctions against Tehran last year.

Workers – including truck drivers, farmers and merchants – have since launched sporadic protests against economic hardships, which have occasionally led to confrontations with security forces.

“Today the country is facing the biggest pressure and economic sanctions in the past 40 years,” Rouhani said, according to the presidential website. “Today our problems are primarily because of pressure from America and its followers. And the dutiful government and Islamic system should not be blamed,” he added.

However Rouhani added that he was confident the US “would also fail in its economic war against Iran when faced with the Iranian people’s resistance”.

Iran’s economy has suffered from years of mismanagement, complicated further by US sanctions. Real incomes have fallen, with inflation peaking at over 35 per cent, compared with below ten per cent a year ago. Last month, the government reintroduced subsidies for basic foodstuffs in an attempt to ease the pressure on families, but as the costs of imported goods have risen, the government deficit has also increased.

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Washington withdrew from the landmark 2015 nuclear deal signed under then President Barak Obama last May, despite protest from cosignatories Russia, China, Germany, France and the UK. Since coming into effect in November, European states expressed their reluctance to comply with the decision of US President Donald Trump’s administration, revealing this week that they are interested in creating a new European-based financial tool to bypass the sanctions.

The spokesperson said that the EU parties – France, Germany and the UK – “are committed to maintaining financial cooperation with Iran,” noting that the new tool was in its final phases.

In response to the reports, Trump administration officials have threatened strong economic penalties if the EU makes it easier to do business with Iran, according to the Associated Press.

“The choice is whether to do business with Iran or the United States,” Senator Tom Cotton told reporters: “I hope our European allies choose wisely.”

The US has offered some exemptions from the sanctions to neighbouring Iraq and Turkey – whose trade is significantly regionally integrated – as well as Italy, Japan, China and India who rely on Iran for oil. However, last week it moved to charge Chinese telecoms giant Huawei for failing to comply with sanctions against Iran that were in place in 2012, signalling that its tolerance over the issue is limited.

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