Iran Economic Forecast

Iran Economic Outlook

September 7, 2021

The economy likely remained depressed in Q1 SH 2021 (April–June). Covid-19-related restrictions should have kept the non-oil sector relatively muted, but the oil sector likely benefited from rising output throughout the quarter. Turning to Q2 SH 2021, conditions remain fairly similar as the non-oil sector continues to grapple with relatively tight restrictions due to still-elevated new Covid-19 cases and a shaky vaccine rollout—despite having gained considerable traction since mid-July. Nevertheless, the oil economy continues to benefit from an extremely low base effect, with output hitting the highest level since April 2019 in July. On the political front, in late August lawmakers approved nearly all of the newly elected president’s cabinet choice, most notably anti-Western conservative Foreign Minister Hossein Amirabdollahian, who will be tasked with resuming nuclear talks with the West.

Iran Economic Growth

GDP is expected to rebound in SH 2021 (March 2021–March 2022) due to stronger oil output. However, headwinds persist, with much depending on the path that U.S.-Iran relations take under the Biden administration, and the evolution of the pandemic domestically. Panelists see the economy growing 3.2% in SH 2021, which is unchanged from last month’s forecast, and expanding 4.1% in SH 2022.

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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