Iran Economic Forecast

Iran Economic Outlook

November 3, 2020

The economic panorama remained dire in recent months amid the twin impact of U.S sanctions and a third wave of coronavirus infections in the country. On 29 October, the U.S. unveiled further sanctions on petrochemical sales, adding more pressure to the embattled oil sector: Output stagnated in Q3, remaining at July’s record low level through August and September. Moreover, also on 29 October, the U.S. announced it had sold 1.1 million barrels of Iranian petroleum that was seized en route to Venezuela, denying the Iranian government much-needed revenues with the proceeds channeled towards U.S. domestic causes. Meanwhile, a rapid increase in daily cases at the outset of Q4 has necessitated a tightening of restrictions, including the closing of the border with Iraq and the closure of schools and universities, which bodes ill for activity.

Iran Economic Growth

In SH 2020 (March 2020–March 2021), the economy is set to shrink markedly for the third straight year amid U.S. sanctions and lower oil production. Faltering capital spending will hit the non-oil private sector, while the oil economy will suffer from falling demand. The pernicious and prolonged nature of the pandemic is a key downside risk ahead. Panelists see the economy contracting 7.3% in SH 2020, which is up 1.2 percentage points from last month’s forecast. In SH 2021, the economy is seen growing 2.6%.

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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