Arabic version: مستشار إيراني يتحدى ادعاء ترامب بانهيار الاقتصاد

According to Cnbc, former Central Bank of Iran economic adviser Mehrdad Sepahvand said Iran’s economy is deteriorating under mounting sanctions but is not on the verge of collapse, challenging U.S. President Donald Trump’s assessment.

Sepahvand, now a director at Daric Investment Group, said shops remain stocked with food and basic goods and there has been no panic buying. He also said public confidence in the banking system has not collapsed, despite serious imbalances and severe cyberattacks, and that there has been no major run on banks.

Iran’s gross domestic product is estimated to have contracted 2.7% in the year ending March, according to the World Bank. The World Bank also put inflation at 62.2% in February and said food-price inflation reached a historical high of 99%. An Iranian official estimated the war caused the loss of one million jobs, according to the New York Times.

Sepahvand warned that the United Arab Emirates’ decision to halt trade and financial ties with Iran could create a tougher test. The UAE had been Iran’s largest source of imports before the war, and Sepahvand described it as one of Iran’s main financial gateways. He said the break could pressure the exchange rate, increase trade costs and feed inflation over the next two quarters.

His current estimate is for a contraction of about 5% this year, with the UAE measures potentially worsening the situation. He said the economic and political pressure is strengthening hardliners and making an agreement with the United States harder to reach, while low-income Iranians and young people bear the effects of rising prices and disappearing jobs.