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comprehensive new nuclear agreement that moves beyond the 2015 terms, Iran would see GDP expand by 4.3% this year and by 5.9% and 5.8% in 2022 and 2023, respectively, the IIF forecast.
Also under this scenario, official reserves could more than double by the end of 2023 from $70bn as of May this year, foreign direct investment would help deliver jobs and Iran would achieve a fiscal surplus by 2023, the organisation said.
US President Joe Biden wants to eventually broaden the nuclear pact to put tighter controls on Iran’s nuclear and ballistic missile programmes and address Tehran’s support for various militant groups in the Middle East. Iran has rejected overtures from the US aimed at securing these objectives.
No deal
If Tehran and the major powers fail to strike any agreement to revive the JCPOA, unemployment in Iran would likely remain in double digits and there would be subued economic growth of 1.8% this year, the IIF concluded.
Iran appears to have lately emerged from a bitter recession that lasted nearly three years.
4.0 Real Economy 4.1 Industrial production
Iran’s industrial output up 6% y/y in first three Persian calendar months says central bank
Iran’s industrial sector grew by 6% in the first three months of the Iranian calendar year (March 21-June 21), according to Deputy Industry Minister Mehdi Sadeqi Niaraki. Sadeqi Niaraki was reported as citing Central Bank of Iran (CBI) data by the semi-official Mehr News Agency.
The uptick coincided with a cessation of coronavirus (COVID-19) restrictions across the country, with factories returning to work. However, industrial production remained at a stubbornly low level due to the severe devaluation of the Iranian rial against hard currencies, forcing producers to bump up prices.
In the first four months of the Persian calendar year (March 21-July 22) more than 2,000 production units and over 54,000 jobs were created, the minister added. Year on year, job creation in industry was up 46%, he said.
The CBI, meanwhile, has given a figure of 6.2% for Iran’s GDP growth in the first three months of the Iranian year, official news outlet PressTV has reported. The figure was 4.7% excluding oil.
The central bank reportedly calculated the data against prices of 2016, using that year as a base year because the Iranian rial was firm against international currencies in that year.
On September 19, bne IntelliNews published analysis making the case that Iran’s economy is often wrongly seen as heavily reliant on hydrocarbon sales. According to the article: “We can start with the big picture, and kill an early assumption. Iran is not a hydrocarbon economy. Even in their un-sanctioned state hydrocarbons value-add rarely rose above 20% of GDP and for most of the time hydrocarbons contributed around 15% of GDP – far lower than the 40-80% levels which prevail in the true hydrocarbon economies of Saudi
18 IRAN Country Report February 2022 www.intellinews.com