Iran’s ‘Misery Index’ Jumps As U.S. Oil Sanctions Cripple Economy

Iran’s ‘misery index’—an informal measure of an economy that adds inflation to the unemployment rate—more than doubled this past winter, jumping to 39 percent from 19.4 percent in the previous winter, and is likely to further spike as the U.S. sanctions are crippling the Iranian economy and its main export revenue generator, oil.

According to data from the Statistical Center of Iran (SCI), cited by the National Council of Resistance of Iran, the fourth quarter of Iran’s calendar year—December 2018 through March 2019—saw inflation rate surging to 26.9 percent and unemployment rate at 12.1 percent.

After March, Iran’s inflation in the spring further soared and stood at 37.6 percent in June, according to the National Council of Resistance of Iran.

The ‘misery index’ is set to further increase after the U.S. removed all sanction waivers for Iranian oil buyers, leading to another plunge in Iran’s exports.

One week before the end of June, Iran’s oil exports were estimated to have dropped to 300,000 bpd or lower, Reuters reported, citing industry sources and tanker data. Iranian exports in May are estimated at 400,000 bpd-500,000 bpd.

Iran’s economy contracted by 4.9 percent in the 2018-2019 year ended in March, slipping further into recession as diminishing oil exports due to the U.S. sanctions are depriving the Islamic Republic of its economic lifeline—oil revenues.

The 4.9-percent contraction between March 2018 and March 2019, reported by the Statistical Center of Iran, is likely to worsen further as the U.S. removed all sanction waivers for Iranian oil buyers as of May 2.

According to the International Monetary Fund (IMF), Iran’s economy is expected to shrink by 6 percent this year, while the annual inflation will spike to 37.2 percent.  

A World Bank report from June showed that Iran’s annual inflation had risen sharply from about 10 percent in the middle of 2018 to about 52 percent in April 2019, “contributed by a depreciation of the rial in the parallel market of more than two-fold compared to levels prior to the announcement of U.S. sanctions in April 2018.”