May 2 (UPI) — Saying the United States is likely to walk away from a U.N.-backed nuclear agreement next week, OPEC-member Iran said it was making budget preparations.
U.S. President Donald Trump needs to decide by May 12 whether to issue sanctions waivers to Iran. If he doesn’t, it would counter the U.N.-backed nuclear agreement that opens trade doors with one of the Organization of Petroleum Exporting Countries’ biggest producers.
Trump in April suggested to OPEC the price of oil was too high. Reneging on the deal, however, would sideline hundreds of thousands of Iranian barrels of oil in an already-tightened market and cause the price of oil to move even higher.
For Iran, the loss of those additional barrels would mean a loss of upwards of $700 million per day at today’s prices. Iranian government spokesman Mohammad-Baqer Nobakht was quoted by the official Islamic Republic News Agency as saying that Tehran was already busy with budgetary accommodations.
“We have paved the way and prepared necessary budget for that era,” he said.
Iran is the third largest oil producer in the Organization of Petroleum Exporting Countries. Campaigning for a second term in office last year, Iranian President Hassan Rouhani said easing international sanctions and addressing a high rate of inflation were national priorities. For a two-month period in March, the Central Bank of Iran reported inflation at 9.6 percent, down from the 10 percent reported during the two-month period ending in January.
The Iranian economy is expected to stabilize at around 4.5 percent over the medium-term. The International Monetary Fund, in a 2017 assessment, said gross domestic product swelled by as much as 6.6 percent, but should moderate at around 3.3 percent this year.
Last year, the IMF said unemployment in Iran was high, job creation was slow and per capita income was unchanged from a decade ago.
“More recently, renewed uncertainty regarding sanctions is dampening sentiment,” the report read.
Iran’s Central Bank said earlier this year, however, that the economy created 650,000 new jobs in the past fiscal year. Growth for 2018, however, will depend largely on non-oil sectors of the Iranian economy.