The Iranian economy has struggled, despite the lifting of various sanctions due to the 2015 nuclear agreement, known as the JCPOA. However, despite the slow start to receiving foreign investment, a recent deal appears to be moving forward with European carmaker Renault. This multi-million dollar deal will be a boost to the economy, as part of the deal includes raising vehicle production within Iran.
This new deal was signed just days after a new sanction bill targeting Russia, Iran, and North Korea was signed into law by President Trump. The roughly $780 million agreement to produce approximately 150,000 additional cars a year, and possibly more, is the largest foreign car deal in Iran’s history, according to their state-run PressTV.
Those within the Iranian leadership see it as a victory for Rouhani, who has argued that the regime’s survival is dependent on foreign investments. He has also pledged to revitalize the economy, despite the corruption and other issues that keep sanction relief from impacting the average Iranian. The economy has limped along for years on oil sales, but the release of funds related to the nuclear deal have been funneled to military operations throughout the region.
American restrictions continue to keep most international banks from providing financing or credit to Iran, and the country remains cut off from international payments systems for debit and credit cards.
Officials of the U.S. Treasury Department have not commented on the Renault deal, so there is no clear determination of whether the Renault deal violates the recently passed U.S. sanctions.
Larger issues within the Iranian economy are focused on high unemployment, with 4.5 million graduates out of work. While the number of educated Iranians has increased, the job market capacity has not only failed to grow, and even regressed in some areas. The Central Bank of Iran recently announced an inflation rate at 10.3% in June 2017, which is a two-digit increase in the index. The inflation rate also reached 7.6% in June. Other sources believe the inflation rate is closer to 9%.
Various members of the regime have continued to slam Rouhani on the economy, arguing that statistics are reflecting the real life of average Iranians. The National Council of Resistance of Iran (NCRI) continues to report on the impact of the economy, as well as human rights abuses. The NCRI, along with its primary member the PMOI/MEK, have continued to point out that these economy agreements are essentially helping the regime to continue to limp along, but these agreements are just band-aids on the larger domestic issues and social unrest within the country.