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In the January 2020 edition of its Global Economic Prospects report released on January 9, the World Bank estimates that Iranian GDP contracted by as much as 8.7% in 2019, a year that saw the Trump administration gradually introduce tougher and tougher sanctions against Tehran including a drive to squeeze all Iranian oil off world export markets. In the June 2019 edition of the report, the international financial institution only foresaw a contraction of 4.5%.
In further bad news for Iran, while the World Bank six months ago was counting with a resumption of Iranian growth in 2020 to 0.9%, it now sees stagnation of 0.0%. And that figure, it added, “assumes that the impact of sanctions tapers somewhat”. Whether that tapering occurs may well depend on whether US President Donald Trump regards it as in his interests as his campaign to get re-elected in November ramps up.
Iranian GDP in 2018 shrank by 4.9% following growth of 3.8% in 2017.
In a section on fiscal challenges faced by economies, the latest World Bank Global Economic Prospects report noted that Iran is a country where subsidies for products subject to price controls, such as petroleum, amount to a large portion of government expenditures that exceeds 10% of GDP.
4.2.2​ PPI dynamics
Iran’s autumn PPI turns negative for first time in four years
PMI for Iran falls into contraction territory
Iran’s producer price inflation (PPI) stood at -2.3% in the autumn period (September 23-December 21, 2019), marking the first negative reading for four years, the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) announced on February 1.
According to the data—compiled by the Statistical Center of Iran (SCI)—the lowest figure was recorded for the coal industry and oil refineries (-10.7%). Next were paper and paper products (-4.6%) and petrochemicals (-2%).
The highest inflation rates in industry were for office and computing appliances (26.6%), garment production, processing, and dying (9.5%) and transportation equipment production (7.8%).
A purchasing managers’ index (PMI) provided by the Iran Chamber gives the Islamic Republic a reading of 45.79 in the fifth Persian calendar month (ended August 22) compared to 50.07 in the preceding month and
15​ IRAN Country Report April 2020 www.intellinews.com