Iran Economic Forecast

Iran Economic Outlook

November 27, 2018

Iran’s economy remains in dire straits despite the unexpected U.S. decision early in November to grant sanction waivers to key buyers of Iranian oil, including China, India, Japan and Turkey. Given the eight countries account for around 75% of Iran’s total oil shipments, the decision will give a much-needed boost to oil revenues. In other positive news, expectations of larger inflows of hard currency prompted the rial traded in the parallel market to appreciate markedly in November. Nevertheless, the waivers will expire in early May, while the remaining sanctions were left in place, including penalties for international insurers covering Iranian oil tankers.

Iran Economic Growth

Despite the announcement of waivers, Iran’s economy is expected to be in recession this year and next. Economic sanctions are disrupting economic activity, fueling inflation and hampering business and consumer sentiment. Panelists see the economy contracting 3.7% in SH 2019, up 0.2 percentage points from last month’s forecast, before growing 1.0% 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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