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Investors, many of whom were new entrants to the market in 2019 when officials encouraged new players to look for value in the bourse, have lost billions of dollars in market turmoil that saw the TSE’s main index, the TEDPIX, plummet back down to near a million points, having broken through the million threshold for the first time in May 2020 and smashed through the two-million barrier just three months later.
On the political front, hardline Iranian MPs on February 22 protested against the Rouhani government’s decision to permit “necessary” monitoring of Iran’s nuclear development programme by the UN nuclear watchdog for up to three months. The lawmakers claimed the move broke a law mandating an end to the International Atomic Energy Agency’s (IAEA’s) snap inspections.
Meanwhile, Iran’s attorney general has indicted information and communications technology minister Mohammad Javad Azari Jahromi on charges including not properly implementing internet censorship policies.
Jahromi, the youngest member of President Hassan Rouhani’s cabinet and the official behind the introduction of fourth-generation (4G) broadband cellular network technology to Iran has bucked the trend adhered to by previous generations of Islamic Republic officialdom by siding with the country’s youth in the battle against shutting down popular social media applications like Instagram and WhatsApp in recent years.
Looking ahead, the January edition of the World Bank’s Global Economic Prospects report forecasts that GDP growth of 1.5%, from a very low base, is in reach for Iran in 2021. But the situation is fluid. The dropping of the sanctions by the Biden administration would lead to a big revision in prospects—in November, the Institute of International Finance (IIF) trade body said Iran’s economy could expand by as much as 4.4% in 2021 and grow by 6.9% in 2022 and 6% in 2023 if the sanctions were chucked out.
The International Monetary Fund (IMF) with its World Economic Outlook figures presented last October (thus a bit behind the curve by now) predicted that Iran’s GDP would contract 5% in 2020 but bounce back by 3.2% in 2021.
Iranian consumer prices in 2019 rose 41% and were on course to grow 30.5% in 2020 and 30% in 2021, the IMF said. However, the official annual inflation rate now stands at 46.2% (compared with less than 10% at the point in May 2018 that Trump quit the nuclear deal) and price growth is very unevenly spread among the various goods and services categories.
Looking at Iran’s current account balance as a percentage of GDP, the Fund gave figures of 1.1%, -0.5% and 0.3% for 2019, 2020 and 2021, respectively. Unemployment was expected to grow to 12.2% in 2020 from 10.7% in 2019 and rise to 12.4% in 2021, the IMF added.
5 IRAN Country Report March 2021 www.intellinews.com
