Diplomat: Western Officials See Iran’s Economy Imploding Quickly
Western government experts estimate that Iran will run out of foreign exchange reserves in six months to a year,
WASHINGTON — Western governments believe that Iran’s economy is imploding so quickly that it could essentially collapse next spring under the combined pressure of international sanctions, an oil embargo and internal mismanagement by officials in Tehran, said a European diplomat here.
Western government experts estimate that Iran will run out of foreign exchange reserves in six months to a year, making it impossible for the Islamic Republic to sell products abroad and buy the imports it needs to continue its manufacturing sector and run public services, the European diplomat said.
Western governments have steadily tightened economic sanctions on Iran this year in the hope of crippling trade and setting off an economic crisis that will force leaders in Tehran to curb or abandon a nuclear program that the West fears is aimed at building a nuclear bomb. Tehran has remained defiant, insisting it is enriching uranium for peaceful purposes. Western officials believe that a full-scale balance-of-payments crisis could spark domestic unrest and threaten the regime’s survival.
The European Union this week added new sanctions on Iran’s energy, financial and natural resources sectors, moves likely to further drain Iran’s foreign currency reserves and accelerate the plunge in the value of its currency, the rial.
Sanctions have cut Iranian oil exports by half and curtailed Tehran’s ability to conduct international financial transactions, said the diplomat, who spoke to several reporters on condition of anonymity because of the diplomatic sensitivity of the subject.