Iran Economy to Retrench, Facing Sanctions……….
“TEHRAN, Iran (AP) — An Iranian state-owned newspaper quotes the country's Central Bank governor as saying imports should be decreased in response to the sanctions imposed on Iran over its nuclear program. Mahmoud Bahmani was quoted by the Iran daily on Tuesday as saying the focus should be on importing "necessary goods," and that the sanctions would help boost domestic production. Iran's economy has been hard hit because of years of sanctions. Its annual import bill tops $50 billion, and Bahmani's call appears aimed at cutting expenses……”
Foreign exchange will become scarcer and imports will cost more. The sanctions will reduce exports and reduce forex earnings; they will also make some imports more costly as the pool of willing suppliers shrinks. It is the usual economic effect of reducing the supply of goods and services while demand is expanding at a steady rate.
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