Gulf Daily News

Thursday 31 August 2006


 

 

Inflation 'is bigger threat for Tehran'
 

TEHRAN: Iran's economy could survive stricter sanctions imposed over the nuclear programme but faces potentially greater perils from high inflation and excessive spending on petrol imports, economists said.

Iran's heavily oil-dependent economy has endured wide-ranging sanctions ever since the 1979 Islamic revolution and economists doubt whether new penalties imposed by the UN Security Council would strangle its activity.

"Economic sanctions create problems, but the Iranian economy has learned to circumvent them, especially through third countries," said the chairman of the Atieh Group consultants, Bijan Khajehpour.

"The main impact on the Iranian economy (of more sanctions) will be the increased cost of certain imports," he said.

Sanctions such as freeze the assets of regime officials or even limits on foreign investment could be imposed after a UN deadline passes today for Iran to halt sensitive uranium enrichment.

"More sanctions would be serious but would not kill Iran's economy, which is capable of rendering the sanctions unsuccessful," said prominent analyst Saeed Laylaz.