Iran Economic Forecast

Iran Economic Outlook

April 2, 2019

The economy likely languishes in recession, as U.S. sanctions have reduced oil exports significantly and put pressure on the exchange rate, causing inflation to surge and hurting consumers’ purchasing power. According to OPEC data, crude oil production stabilized at the onset of this year but was still down markedly from last year’s average. Moreover, there is still considerable uncertainty over the possibility of extensions to U.S. waivers on some Iranian oil exports, which are set to expire in May. This uncertainty will likely keep oil exports subdued in the coming weeks. In late March, the country was hit by extreme flash floods; although they caused severe short-term economic disruption, key oil pipelines were reportedly unscathed.

Iran Economic Growth

Iran’s economy is expected to contract in SH 2019. Economic sanctions will depress oil exports, while the weaker rial in the parallel market will fuel inflation and hurt consumers’ purchasing power. Uncertainty over the future of U.S. waivers on Iranian oil exports, geopolitical tensions and vulnerability to oil price swings pose downside risks to the outlook. Panelists see the economy contracting 3.7% 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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