Page 14 - IRANRptMar20

Iran’s official non-oil GDP enters growth territory of 0.9% in Persian third quarter
Iran’s gross domestic product excluding oil extraction and production entered positive territory in the third quarter of the 2019/2020 Persian year (September 23 to December 21) with a growth rate of 0.9%, according to the Statistical Centre of Iran (SCI).
The Iranian economy may be diversified but the crushing US sanctions introduced by the Trump administration incrementally since mid-2018 not only aim to wipe out Iranian oil exports, they target swathes of industry including automotive production, telecoms, petrochemicals, mining and metals.
Overall GDP in the Persian year Q3, including oil production, was in negative territory, with SCI officials posting -1.7%. The agriculture, mining and services sectors endured contractions of -1.4%, -1.9% and 0.7%, respectively.
Overall GDP in the first three quarters of the current Persian year (March 21 to December 21, 2019) stood at -7.6%. When oil is removed from the calculation, growth was a flat 0%.
Agriculture, mining and services registered Q1-to-Q3 rates of 3.2%, -16.6% and -0.2, respectively.
3.1​ ​Macroeconomic outlook
IMF sees no additional impact of sanctions on Iran’s economy in 2020
The International Monetary Fund (IMF) does not see US sanctions having an additional impact on Iran’s economy next year. The IMF forecasts that Iran’s economy will contract by 9.5% this year but also that Iranian GDP growth will be flat next year.
“The estimate is that ... sanctions that were reintroduced last year and tightened this year, next year will not have an additional impact,” Jihad Azour, director of the IMF’s Middle East and Central Asia Department, was cited as saying by Reuters on October 28.
The same day, US Treasury Secretary Steven Mnuchin, on a visit to Jerusalem, told Israeli Prime Minister Benjamin Netanyahu: "We will continue to ramp up [sanctions on Iran], more, more, more ... I just came from a very productive working lunch with your team. They gave us a bunch of very specific ideas that we will be following up."
The IMF has also predicted that Iran will have a fiscal deficit of 4.5% in 2019 and 5.1% in 2020. Iran would need oil priced at $194.6 a barrel to balance its budget in 2020, it said. On the inflation front, the Fund said Iran can expect 35.7% this year and 31% next year.
It reiterated its recommendation that the Iranian authorities should align the Iranian rial (IRR) official exchange rate with the market rate to control inflation. Looking at trade, the IMF forecast Iran’s exports of goods and services will drop to $60.3bn this year from $103.2bn last year, and will fall further to $55.5bn in 2020.
14​ IRAN Country Report​ March 2020 www.intellinews.com