Iran Economic Outlook
October 1, 2019
The economy remains under siege from U.S. economic sanctions, with August’s crude oil production down an estimated 1.4 mbpd compared to August 2018 and oil exports largely choked off. That said, exports of oil products are still robust, as the large number of buyers makes it harder to enforce sanctions. In September, Iran imposed export tariffs on steelmaking raw materials to support Iran’s domestic steel industry. This should weigh heavily on Iran’s exports of iron ore, which totaled 17 million tons last fiscal year. On the political front, France suggested extending Tehran a USD 15 billion credit line in an attempt to salvage the 2015 nuclear deal. However, this proposal relies on U.S. approval, which has thus far not been forthcoming—and seems increasingly unlikely given the escalation of tensions following attacks on Saudi’s oil facilities in mid-September.Iran Economic Growth
The economy is expected to decline sharply in SH 2019 as U.S. economic sanctions continue to decimate crude oil exports. Moving to SH 2020, growth is expected to return on increased exports of refined oil products and a low base effect. However, tensions with the U.S. and more broadly across the region pose downside risks to the outlook. Panelists see the economy contracting 6.0% in SH 2019, before growing 0.1% in SH 2020, which is unchanged from last month’s forecast.Iran Economy Data
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