Iran Economic Forecast

Iran Economic Outlook

January 11, 2022

GDP growth should have remained robust in H2 2021, but ongoing U.S. economic sanctions and a spike in new Covid-19 cases in Q3, which led to a nationwide lockdown, likely subdued momentum somewhat. Oil production continued to pick up in July–November, which should have supported the energy sector. That said, the non-oil sector likely struggled as Covid-19 restrictions continued to keep non-essential businesses closed in some regions of the country. Nevertheless, new cases have declined in recent weeks, boding well for activity ahead. On the fiscal front, in mid-December President Ebrahim Raisi submitted next year’s budget proposal, which includes a stark rise in military spending and a steep fall in expected oil exports for the next fiscal year. Meanwhile, progress on reviving the 2015 nuclear deal was made in late December and authorities expect to make a breakthrough in the coming month.

Iran Economic Growth

GDP growth is set to accelerate in SH 2021 (March 2021–March 2022), due to higher oil output and a healthy rebound in exports. In SH 2022, growth should pick up further due to stronger household spending and investment activity. That said, headwinds persist with much depending on the course of the pandemic and the path that U.S.-Iran relations take under the Biden administration. Panelists see the economy growing 3.1% in SH 2021 and 4.0% in SH 2022, which is up 0.1 percentage points from the previous month’s forecast.

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 %)  
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
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)  -  
Current Account Balance (USD bn)1.216.415.826.7-  
Trade Balance (USD billion)5.420.822.632.6-  
Exports (USD billion)  
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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