Sputnik - Iran is seeking to change its economic policies in the face of US sanctions by replacing several ministers, and drafting contingency plans � such as a fiscal stimulus package, diversification in foreign trade and investment ties, as well as an overall greater degree of self-reliance.




Kristian Rouz�� Iranian President Hassan Rouhani has replaced several key officials on�his government's economic team as�he seeks to�enhance Iran's self-reliance in�the face of�a new round�of US sanctions. The move comes after�the International Monetary Fund (IMF) said US economic restrictions could have pushed the Iranian economy into�a recession.

The Iranian parliament approved changes to�the nation's top economic leadership proposed by�Rouhani Sunday�� and just several days before�a US crackdown on�Iranian oil exports takes effect. For his part, Rouhani has claimed the US is "isolated" in�its urge to�restrict Iran's foreign trade.

The Iranian president also touted the EU's intent to�maintain economic ties with�Iran in�the new economic reality.
"It does not happen often that the US makes a decision and its traditional allies abandon it," Rouhani said in�his address to�the parliament.


Rouhani has appointed technocrat economist Farhad Dejpasand as�Iran's new Minister of�Economics and Finance. Dejpasand, along�with his new team, are expected to�find a way to�maintain Iran's economic stability in�the face of�an expected decline in�oil revenues.

Other officials appointed by�Rouhani include a new Labor Minister, as�well as�new chiefs in�the Industry and Roads Ministries.

Some economists have said Iran is seeking to�offset the looming decline in�exports revenues by�increasing its domestic tax and manufacturing base. Tehran has recently ramped up�its domestic investment in�infrastructure and the industrial sector in�the form of�fiscal stimulus�� by�ramping up�its budget spending.

However, it remains unclear how the new Iranian economic team will mitigate the initial shock of�a dramatic decline in�oil revenues.

Earlier this month, the IMF said the Iranian economy could contract by�as much as�1.5 percent in�2018 due to�the projected slump in�oil revenues. IMF economists said Iran's recession could deepen to�3.6 percent next year.

This is compared to�the IMF's previous estimates of�a 4-percent GDP expansion in�Iran this year and next.

For its part, the EU has sought to�establish a new payment system in�order to�continue �'business as�usual" with�Iran despite�a massive outflow of�dollar liquidity from�the Iranian economy. European countries have reiterated�economic relations with�Iran�are crucial to�some of�their multinational companies.

Meanwhile, Rouhani also urged national unity in�the face of�economic standoff with�the US.
"Our main enemy, America, faces us with�a drawn sword and we have to�fight it and we have to�unite. Regardless of�factions� we are all part of�the Iranian nation," Rouhani said.


Rouhani's statement comes as�the government of�the Islamic Republic appears to�be divided over�how to�address the challenges posed by�US sanctions.

Some Iranian hardliners have urged a greater degree of�self-reliance, at�times going as�far as�rejecting the prospect of�cooperating with�the EU.

Iran's moderates, on�the contrary, are urging deeper ties between�Iran, the EU, Russia, and China�� in�hopes that a possible increase in�multilateral trade and investment could help the Islamic Republic withstand US restrictions.

Rouhani is trying to�strike a compromise between�these factions to�rally greater support for�his policies�� both in�Tehran and across�the country.
"Russia, China, India, the European Union, and some African and Latin American countries are our friends," Rouhani said. "We have to�work with�them and attract investments."


The new round�of�US sanctions against�Iran�is set to�go into�effect on�November 4, with�the ultimate goal of�bringing Iranian oil exports to�zero.

Trump administration officials said the sanctions could be subject to�review if the Islamic Republic changes some of�its foreign policies, and engages in�comprehensive nuclear talks in�line with�the UN's Non-Proliferation Regime.

But Iranian officials have so far rejected such calls.
"By bringing up�a discussion of�missiles and other issues they are not following�an appropriate path," Chairman of�Iran's Assembly of�Experts Ayatollah Ahmad Jannati said.


Amid the ongoing geo-political standoff, international energy markets are facing the prospect of�a further decline in�oil supply, which could provide additional boost to�the oil prices. So far, however, international investors have already priced in�the most obvious effects of�these new Iran sanctions�� but�economic uncertainty stemming from�US-Middle East relations still lingers.