NUCLEAR DEAL: IS IRAN'S ECONOMY BETTER OFF NOW?
US President Donald Trump has repeatedly threatened to abandon the agreement and will make a decision on 12 May about whether to reintroduce sanctions from his country.
THE 2015 nuclear deal between Iran and six world powers the US, Russia, China, the UK, France and Germany - lifted international sanctions on Iran's economy, including those on oil, trade and banking sectors.
In exchange, Iran agreed to limit its nuclear activities.
US President Donald Trump has repeatedly threatened to abandon the agreement and will make a decision on 12 May about whether to reintroduce sanctions from his country.
So, as that deadline draws nearer, Reality Check examines how Iran's economy has fared since the nuclear accord came into effect.
Iran's economy was in a deep recession in the years before the nuclear agreement. But the International Monetary
Fund reported that the real GDP of
Iran grew 12.5% in the first year following the implementation of the deal.
Growth has fallen since then, and the IMF estimates the economy will grow at 4% this year, which is healthy but below the
8% target
Iran had for the five years following the deal.
That initial boost was almost all thanks to the hike in oil exports. Sanctions on Iran's energy sector halved the country's oil exports, to around 1.1 million barrels per day in 2013. Now Iran exports almost 2.5 million barrels daily.
Iran's non-oil exports in the year to March 2018 reached $47bn (£34.5bn) which is almost $5bn more than the year before the nuclear agreement.
According to Iran's ministry of agriculture, the export of "signature items" such as pistachio nuts stood at $1.1bn in the same period, slightly lower than the previous year.
But Iran's agricultural exports, including pistachios and saffron, are more affected by the country's drought, rather than sanctions or trade relations. Following the nuclear agreement, the US lifted a ban on Iranian luxury items such as carpets and caviar. Sanctions cut exports of Iranian carpets to the US - its biggest market - by 30% .
Iran's trade with the European Union has increased significantly thanks to the lifting of sanctions but China, South Korea and Turkey remain Iran's top three trading partners.
In 2012, the rial lost almost twothirds of its value against the dollar because of sanctions and domestic mismanagement of the currency market. The sanctions limited Iran's oil revenues and its access to the global banking system.
Iranian President Hassan Rouhani promised the nation that following the nuclear deal "you will not see the exchange rate go up every hour".
Mr Rouhani managed to deliver on that promise by keeping the Iranian currency stable for almost four years. But in late 2017, when President Trump refused to certify the nuclear deal to Congress, the rial started to fall again.
The rial has lost almost half of its value against the dollar since last September. Many Iranians have been buying hard foreign currency to hedge against the possible future collapse of the nuclear deal, the return of sanctions and a fresh currency crash.
It was reported that some $30bn of capital left Iran in the first quarter of 2018, mostly to neighbouring countries and the Caucasus.
The Iranian government has since launched a crackdown on the foreign exchange market, banning exchange offices from selling hard currency and introducing limits (at $12,000) on cash possession - all in a bid to rescue the rial.
Household budgets declined steadily for seven years until 201415 when the nuclear deal was struck and increased slightly the following year.
The analysis also shows that Iran's middle class has been hit the hardest in the past decade. While the average household budget has fallen 15%, the figure is 20% for middle-class families.
Experts blame a combination of domestic mismanagement of the economy and international sanctions for the fall in household budgets.
Most of the post-nuclear deal boom came from increased oil revenues that go directly into the government coffers and that takes time to trickle down into people's pockets.
President Donald Trump is expected to pull the United States out of the Iran nuclear agreement on May 12. Tehran signed the Joint Comprehensive Plan of Action, with China, France, Germany, Russia, Britain, and the United States in 2015.
Iran agreed to curbs on its nuclear program in exchange for the lifting of some sanctions. But the withdrawal of the United States will probably sink the deal. If that happens, Iran
could retaliate by undermining the interests of Washington and its allies in the Middle East.
Here are some possible scenarios:
When Islamic State seized much of Iraq in 2014, Iran was quick to support Baghdad. Iran has since helped arm and train thousands of Shi’ite fighters in Iraq. These Popular Mobilization Forces (PMF) are also a significant political force.
If the deal falls through, Iran could encourage PMF factions who want the U.S. to leave Iraq to step up rhetorical, and maybe military, attacks against American forces.
These could be rocket, mortar and roadside bomb attacks not directly linked to a specific Shi’ite militia, which would allow Iran to deny it had changed its position of avoiding direct conflict with U.S. forces in Iraq.
Iran and paramilitary allies such as Lebanon’s Hezbollah have been involved in Syria’s war since 2012. Iran has armed and trained thousands of Shi’ite paramilitary fighters to shore up the government. Israel says Iran has recruited at least 80,000 Shi’ite fighters.
Iran’s presence in Syria has brought Tehran into direct conflict with Israel for the first time, with a series of high-profile clashes in recent months. Israeli officials say they will never let Tehran or Hezbollah establish a permanent military presence in neighboring Syria.
If the nuclear deal falls through, Iran will have little incentive to stop its Shi’ite militia allies in Syria from carrying out attacks against Israel.
Iran and the forces it controls in Syria could also cause trouble for about 2,000 U.S. troops deployed in northern and eastern Syria to support Kurdishled fighters.
A top adviser to Iran’s Supreme Leader said in April he hoped Syria and its allies would drive U.S. troops out of eastern Syria.
In 2006, Hezbollah fought Israel to a standstill in a 34-day border war. According to Israeli and U.S. officials, Iran is now helping Hezbollah build factories to manufacture precisionguided missiles or refit longerrange missiles with precision guidance systems.
Israeli forces have repeatedly attacked Hezbollah in Syria where the group is leading many of Iran’s Shi’ite militia allies. The rhetoric between Israel and Iran has ramped up in recent weeks. Though Hezbollah and Israel say they are not interested in conflict, the tensions could easily spill over into another Lebanon war.
Hezbollah said last year that any war waged by Israel against Syria and Lebanon could draw thousands of fighters from countries including Iran and Iraq, indicating that Shi’ite militias could come to Lebanon to help Hezbollah.
Hezbollah is also a major political force in Lebanon, and may strengthen its position at elections on May 6. For the moment, the group is working with its political opponents, notably Prime Minister Saad al-Hariri, who is backed by Western governments.
But if the nuclear deal falls through, Iran could pressure Hezbollah to isolate its opponents, a development experts believe could destabilize Lebanon.
“Hezbollah literally controls Lebanese politics,” said Hilal Khashan, a professor of political studies at the American University of Beirut. “If they do that, it would be sheer harassment.”
Iran has never acknowledged direct military involvement in Yemen. But U.S. and Saudi officials say it is supplying rebel Houthi fighters with missiles and other arms. The Houthis have fired missiles at Riyadh and Saudi oil facilities, saying they are retaliating against air raids on Yemen.
Iran and Saudi Arabia are locked in a regional power struggle. Supporters of the Iran nuclear deal say it has prevented the conflict from descending into open warfare. If the deal falls through, Iran could increase support for the Houthis, possibly provoking a military response from Saudi Arabia and Gulf allies such as the United Arab Emirates.
“I’m not ruling out Iranian support to the Houthis,” said Khashan
Iran also has options directly related to its nuclear program. Iranian officials have said that one option they are examining is to withdraw completely from the Non-Proliferation Treaty (NPT), an agreement designed to stop the spread of nuclear weapons. Supreme Leader Ayatollah Ali Khamenei says the country is not interested in developing nuclear weapons. But if Iran withdraws from the NPT, it will set off alarm bells globally.
“This would of course be a disastrous course for the Islamic Republic, as it will find itself isolated,” said Ali Alfoneh, a senior fellow at the Atlantic Council.
Even if Iran does not withdraw from the NPT, it has indicated that it will probably ramp up enrichment of uranium, strictly limited under the deal to help allay fears it could be used to produce atomic bomb material. Under the current deal, Iran’s enrichment levels must remain around 3.6 percent. Iran stopped producing 20 percent enriched uranium and gave up the majority of its stockpile as part of the 2015 agreement.
Uranium refined to 20 percent fissile purity is beyond the 5 percent normally required to fuel civilian nuclear power plants, although short of highly enriched, or 80 to 90 percent, purity needed for a nuclear bomb.
This week, the head of Iran’s Atomic Energy Organization, Ali Akbar Salehi, said Iran was able to enrich uranium to a higher level than it could before the deal.
Iran’s actions may be influenced by the extent to which the other signatories to the deal respond to U.S. withdrawal, according to analysts.