Iran Economic Forecast

Iran Economic Outlook

June 7, 2022

The economy has likely expanded at a robust pace during the year to date, aided by surging oil prices and a 14% year-on-year increase in crude oil production between January and April. That said, oil exports to China have reportedly fallen since the beginning of the war in Ukraine, as China has pivoted to discounted Russian oil. Meanwhile, the war has resulted in rising unemployment and increasing price pressures, negatively affecting the non-oil sector. In May, the government replaced the subsidized exchange rate on essential goods with direct financial support to citizens—initially in the form of one-off cash payments, with an electronic coupon scheme in the works. In the long run, this could help to reduce corruption and improve the public finances. However, the short-term impact has been surging food prices and widespread protests.

Iran Economic Growth

GDP growth should accelerate in SH 2022 (March 2022–March 2023) on stronger oil production, higher oil prices and the reduced impact of Covid-19. International negotiations regarding the country’s nuclear program remain a key source of uncertainty, as a deal would lead to sanctions relief. A flare up of regional tensions and renewed social unrest are downside risks. Panelists see the economy growing 4.3% in SH 2022, which is unchanged from the previous month’s forecast, and 4.0% in SH 2023.

Iran Economy Data

2015 2016 2017 2018 2019
Population (million)79.580.581.482.483.3
GDP per capita (USD)4,9315,2745,635-  -  
GDP (USD bn)392424459-  -  
Economic Growth (GDP, annual variation in %)-1.313.43.8-  -  
Consumption (annual variation in %)-  -  -  -  -  
Unemployment Rate11.812.512.112.110.6
Fiscal Balance (% of GDP)-1.6-1.9-1.8-  -  
Public Debt (% of GDP)38.447.539.531.8-  
Money (annual variation in %)30.023.222.123.1-  
Inflation Rate (CPI, annual variation in %, eop)8.47.97.346.622.2
Inflation Rate (CPI, annual variation in %)11.16.98.226.934.8
Exchange Rate (vs USD)30,16232,42237,74342,00042,000
Exchange Rate (vs USD, aop)29,12330,99433,38440,89542,000
Current Account (% of GDP)0.33.93.4-  -  
Current Account Balance (USD bn)1.216.415.826.7-  
Trade Balance (USD billion)5.420.822.632.6-  
Exports (USD billion)63.084.098.193.4-  
Imports (USD billion)57.663.175.560.8-  
Exports (annual variation in %)-29.233.316.9-4.8-  
Imports (annual variation in %)-18.79.519.7-19.6-  
International Reserves (USD)116104106108105

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