Iran’s economy falters under Trump’s tough sanctions, ex-central bank adviser admits
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A former adviser to Iran’s central bank concedes that the nation’s economy is deteriorating under the weight of US-led sanctions and the UAE’s decisive trade halt, with contraction possibly reaching 5% as Trump’s pressure campaign takes effect.
A former adviser to Iran’s central bank has acknowledged that the country’s economy is suffering under the Trump administration’s effective sanctions regime, though he denies it is on the brink of collapse. Mehrdad Sepahvand, now director of Daric Investment Group, told CNBC that while shops remain stocked and there is no panic buying, the Iranian economy is undeniably deteriorating due to mounting international pressure and internal mismanagement. Despite cyberattacks and banking imbalances, he claims confidence in the banking system has not yet collapsed.
Sepahvand warned that the United Arab Emirates’ bold decision to end all trade and financial ties with Iran could push the country’s contraction to about 5% this year. The UAE, previously a major gateway for Iranian imports, is now taking a stand against Iran’s destabilizing activities. This move is expected to further pressure Iran’s exchange rate, raise trade costs, and fuel inflation, exposing the regime’s inability to shield its people from the consequences of its policies.
The United States, under President Donald Trump, has ramped up pressure on Iran, declaring an unprecedented campaign of economic warfare and isolation. Trump has warned of severe consequences for any country that attempts to give Iran an economic lifeline. The administration’s Operation Economic Fury is designed to choke off Iran’s funding for global terrorism and illicit activities.
World Bank data show Iran’s GDP shrank by 2.7% in the year to March, with inflation soaring to 62.2% in February and food prices hitting record highs. An Iranian official admitted that the ongoing conflict has cost the country one million jobs, a direct result of the regime’s reckless choices.
Sepahvand cautioned that the economic squeeze could embolden hard-line factions within Iran, making a diplomatic agreement with the United States even more difficult. Ultimately, it is ordinary Iranians—especially the poor and young—who suffer most from their government’s intransigence and the necessary measures taken by the US and its allies.