Page 14 - Iran OUTLOOK 2025

on household budgets. The prioritisation of military spending over other sectors also indicated a clear strategic choice in resource allocation, despite ongoing economic challenges facing the general population.
• 5.2 Debt and gross international reserves
In 2024, Iran's external debt position showed a marked decline, falling to $4.36bn by June from $5.82bn in September 2023. This decrease of nearly 25% reflects both the ongoing impact of international sanctions and Iran's limited engagement with global financial markets.
These debt figures should be viewed in the context of Iran's broader external financial position, particularly its gross international reserves. Here, a different pattern emerges: IMF projections indicate reserves will reach $24.3bn by the end of 2024, continuing a gradual recovery that began in 2023, when reserves stood at $21.1bn. This represents a significant improvement from the 2022 low of $19.5bn, though still far below the peak of $117.6bn recorded a decade earlier.
6.0 Real Economy
• 6.1 Industrial production and PMI
Iran's Purchasing Managers' Index (PMI) has registered a decline but remains above 50, suggesting overall economic expansion, according to a report published by the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) on December 10.
Despite an increase in Iran's economy PMI for the second consecutive month in seasonally adjusted figures, it decreased in normal figures. The PMI for local industries dropped in both normal and seasonally adjusted figures.
Rising exchange rates have sharply increased the cost of raw materials and production for many companies, already struggling with limited financial resources due to inadequate currency allocation. Weak demand and low customer purchasing power have further complicated operations, making it difficult for businesses to collect payments.
Meanwhile, disruptive regulations on foreign exchange settlements have led to a decline in exports. Companies are also expressing concern over potential power and gas outages in the coming months,
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