Iran facing the toughest economic situation in 40 years: Rouhani

Iranians shop in the capital Tehran's grand bazar. (File/AFP)
Updated 30 January 2019

Iran facing the toughest economic situation in 40 years: Rouhani

  • US President Donald Trump last year pulled out of an international nuclear deal with Iran and re-imposed sanctions
  • Iran’s rial currency has fluctuated in value in recent months, making it difficult for ordinary people to make ends meet

GENEVA: Iran’s president said on Wednesday the country was facing its toughest economic situation in 40 years, and the United States, not the government, was to blame.
US President Donald Trump last year pulled out of an international nuclear deal with Iran and re-imposed sanctions.
Workers, including truck drivers, farmers and merchants, have since launched sporadic protests against economic hardships, which have occasionally led to confrontations with security forces.
“Today the country is facing the biggest pressure and economic sanctions in the past 40 years,” Hassan Rouhani said, according to the presidential website.
“Today our problems are primarily because of pressure from America and its followers. And the dutiful government and Islamic system should not be blamed,” he added.
Rouhani spoke at a ceremony at the shrine of the founder of the Islamic Republic, Ayatollah Ruhollah Khomeini — part of a series of events leading up to the 40th anniversary of the February 11th revolution.
Iran’s rial currency has fluctuated in value in recent months, making it difficult for ordinary people to make ends meet.


Analysts urge Canada to focus on boosting the economy

Updated 06 July 2020

Analysts urge Canada to focus on boosting the economy

  • Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time

TORONTO: Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian Finance Minister Bill Morneau will deliver a “fiscal snapshot” on Wednesday that will outline the current balance sheet and may give an idea of the money the government is setting aside for the future.

As the economy recovers, some fiscal support measures, which are expected to boost the budget deficit sharply, could be wound down and replaced by incentives meant to get people back to work and measures to boost economic growth, economists said.

“The only solution to these large deficits is growth, so we need a transition to a pro-growth agenda,” said Craig Wright, chief economist at Royal Bank of Canada. The IMF expects Canada’s economy to contract by 8.4 percent this year. Ottawa is already rolling out more than C$150 billion in direct economic aid, including payments to workers impacted by COVID-19.

Further stimulus measures could include a green growth strategy, as well as spending on infrastructure, including smart infrastructure, economists said. Smart infrastructure makes use of digital technology.

“We have to make sure that government spending is calibrated to the economy of the future rather than the economy of the past,” Wright said.

Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time, citing the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by COVID-19 shutdowns.

Standard & Poor’s, Moody’s and DBRS still give Canadian debt the highest rating. At DBRS, Michael Heydt, the lead sovereign analyst on Canada, says his concern is about potential structural damage to the economy if the slowdown lingers too long.

Fiscal policymakers “need to be confident that there is a recovery underway before they start talking about (debt) consolidation,” Heydt said.

Fitch expects Canada’s total government debt will rise to 115.1 percent of GDP in 2020 from 88.3 percent in 2019.

Royce Mendes, a senior economist at CIBC Capital Markets, said the economy still needs more support.

“Turning too quickly toward austerity would be a clear mistake,” he said.