Iran faces 'chronic challenges' beyond US sanctions: Speaker

Iran is facing "chronic challenges" that existed long before US sanctions were reimposed, the influential parliament speaker Ali Larijani said on Monday.

"External factors do affect our economy, but there are problems persisting from before," Larijani said at a press conference.

He listed a number of challenges, including "big, costly government", high interest rates that "disrupt production", cash-strapped pension funds and a water crisis.

Parliament's research centre had "repeatedly warned" of these challenges, Larijani said, but the government has yet to respond on key issues.

The United States' decision in May to withdraw from the 2015 nuclear deal and reimpose sanctions on Iran has added another layer of difficulty.

The International Monetary Fund says the Iranian economy will contract by 1.5 percent in 2018 and 3.6 percent is 2019, largely due to reduced oil sales caused by the renewed sanctions.

Larijani is an influential insider who was previously seen as deeply conservative but has lately forged a close working relationship with the moderate faction led by President Hassan Rouhani.

He dismissed US President Donald Trump's offer to open fresh negotiations on a new deal.

"We hear two types of rhetoric from the US president -- some cheap words and some talk on the side that they are ready for negotiation," he said.