Friday, July 19, 2013

Is Iran Broke?

A vendor counts money in a shop in Tehran's Grand Bazaar January 19, 2009. REUTERS/Raheb Homavandi

World Bank Says Received No Payments From Iran In Six Months -- Reuters

(Reuters) - Iran has not paid back any of its loans to the World Bank for more than six months, the bank said on Thursday, a further sign of the strains on the sanctions-hit Iranian economy.

Faced with a combination of poor fiscal management and Western economic sanctions for its disputed nuclear program, Iran has suffered from spiraling prices and high unemployment in the last year.

The World Bank said it was placing Iran's loans in non-performing status, as it must do when a country has not made any payments for more than half a year. Iran owed the bank $697 million on June 30, of which $79 million was overdue.

The designation from the World Bank, often a lender of last resort to cash-strapped governments, means Iran may find it even harder to get money from commercial creditors.

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My Comment: This is news that should get everyone's attention.

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