As expected, the renewal of economic sanctions against Iran one year ago led to a worsening of an already bad economic situation in Iran. A number of economic indexes attest to the severity of the economic crisis, mainly the budget deficit stemming from the unprecedented drop in the export of Iranian oil, high inflation, and negative economic growth. In contrast, a number of indexes may also suggest that the Iranian economy is gradually acclimating to the sanctions regime. The deepening economic crisis has heightened the sense of frustration among the public, but thus far has not led to an increase in unrest. On the contrary, in the past year, the scope of popular demonstrations has ebbed significantly. In the final analysis, despite the economic crisis and the rising public despair, it seems that the Iranian regime is managing to withstand the American sanctions, and there is even a possibility of a slight economic improvement in the coming year. As long as the Iranian regime feels that it can hold out over time and that the economic crisis does not pose a serious threat to its stability, Supreme Leader Khamenei’s position of not responding to the demands of the American government will likely be strengthened.
Read the full report at the Institute for National Security Studies.