Iran Current Account Balance (USD bn)

Current Account Balance in Iran

The economy has seemingly performed poorly so far this year. Non-oil activity is likely being hit by sky-high inflation, rising unemployment, interest rate hikes and strikes. In addition, exports to China—Iran’s main trading partner—tumbled 39% in January–April, and oil prices are currently down by over a fifth from their mid-Q4 levels, which will be weighing on government coffers. Oil output was up just 1.9% year on year in January–April but has risen in sequential terms so far this year. In politics, following the reestablishment of diplomatic relations with Saudi Arabia earlier this year, at end-May Iran’s supreme leader voiced his support for the resumption of ties with Egypt. Talks between the two countries are set to take place in June. That said, the economic benefits from warming relations with Arab neighbors will likely be limited as long as tough U.S. sanctions remain in place.