Iran Economic Forecast

Iran Economic Outlook

February 5, 2019

The economy is seen contracting in H2 of Iran’s fiscal year (SH), after expanding marginally in H1 according to data from the Statistical Institute, with relatively low oil prices and U.S. sanctions weakening the external sector. As outlined in OPEC’s January report, Iran’s oil production declined significantly in Q4 relative to Q3. On the political front, France, Germany and the UK launched a mechanism on 31 January that will facilitate trade of essentials like food and medicine with Iran. However, with U.S. sanctions limiting trade in other types of goods, the move is unlikely to provide a significant boost to Iran’s economy. Also in January, Syria and Iran signed agreements to secure a strategic long-term relationship intended to boost economic ties.

Iran Economic Growth

Iran’s economy is expected to contract in SH 2019. Economic sanctions will likely fuel inflation and depress exports while uncertainty surrounding the future of U.S. waivers on Iranian oil exports poses a downside risk. Panelists see the economy contracting 3.8% in SH 2019, which is unchanged from last month’s forecast, before growing 1.1% in SH 2020.

Iran Economy Data

20132014201520162017
Population (million)77.478.579.580.581.4
GDP per capita (USD)5,6295,4514,9315,272-  
GDP (USD bn)436428392424-  
Economic Growth (GDP, annual variation in %)-0.24.6-1.313.4-  
Consumption (annual variation in %)-  -  -  -  -  
Unemployment Rate11.511.511.812.512.1
Fiscal Balance (% of GDP)-0.9-1.1-1.7-2.2-  
Public Debt (% of GDP)11.711.841.648.911.9
Money (annual variation in %)38.822.330.023.2-  
Inflation Rate (CPI, annual variation in %, eop)19.616.28.411.88.3
Inflation Rate (CPI, annual variation in %)34.715.611.99.09.6
Exchange Rate (vs USD)24,77427,13830,13032,37636,074
Exchange Rate (vs USD, aop)18,54426,01629,12831,00233,384
Current Account (% of GDP)5.83.20.33.9-  
Current Account Balance (USD bn)25.113.61.216.4-  
Trade Balance (USD billion)29.318.15.420.8-  
Exports (USD billion)92.989.063.084.0-  
Imports (USD billion)63.670.957.663.1-  
Exports (annual variation in %)-4.5-4.2-29.233.3-  
Imports (annual variation in %)-7.511.5-18.79.5-  
International Reserves (USD)118126128121-  

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