Iran Economic Forecast

Iran Economic Outlook

May 8, 2018

Despite the long-awaited unification of the country’s exchange rates in early April and harsh measures from the government and the Central Bank of Iran (CBI) to limit currency trading outside official channels, the Irian rial continued to hit fresh lows in the free market in recent days. The weakening of the rial reflects rising concerns over the possibility that U.S. President Donald Trump will not extend sanctions relief before the 12 May deadline, a de facto withdrawal of the U.S. from the nuclear deal. In an attempt to reduce Iran’s reliance on the USD, the CBI governor stated on 18 April that the country is preparing to replace the greenback with the euro in foreign trade.

Iran Economic Growth

Along with structural weaknesses including a high unemployment rate and a battered financial sector, the potential restoration of sanctions by the U.S. represents the main risk to Iran’s economic outlook. Nevertheless, FocusEconomics Consensus Forecast panelists see growth accelerating to 4.1% in SH 2018, unchanged from last month’s estimate. In SH 2019, growth is expected to edge up to 4.2%.

Iran Economy Data

20132014201520162017
Population (million)77.478.579.580.581.4
GDP per capita (USD)5,6295,4514,948-  -  
GDP (USD bn)436428393-  -  
Economic Growth (GDP, annual variation in %)-1.94.3-1.3-  -  
Consumption (annual variation in %)-1.03.1-3.5-  -  
Unemployment Rate-  -  11.812.5-  
Fiscal Balance (% of GDP)-0.9-1.2-1.7-  -  
Public Debt (% of GDP)11.212.015.914.9-  
Money (annual variation in %)33.241.5-  -  -  
Inflation Rate (CPI, annual variation in %, eop)19.716.28.311.9-  
Inflation Rate (CPI, annual variation in %)34.715.611.99.0-  
Exchange Rate (vs USD)24,79728,05030,26031,751-  
Exchange Rate (vs USD, aop)21,43025,26629,02631,243-  
Current Account (% of GDP)5.83.72.3-  -  
Current Account Balance (USD bn)25.115.99.0-  -  
Trade Balance (USD billion)29.318.112.2-  -  
Exports (USD billion)92.989.064.6-  -  
Imports (USD billion)63.670.952.4-  -  
Exports (annual variation in %)-4.5-4.2-27.4-  -  
Imports (annual variation in %)-7.511.5-26.1-  -  
International Reserves (USD)118126128-  -  

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