Page 3 - Iran OUTLOOK 2024

1.0 Overview
Iran's economy is expected to grow by 3.5% in 2024, according to the International Monetary Fund (IMF). This growth will be driven by a rebound in oil production and exports, as well as increased government spending. However, the economy is still facing a number of challenges, including high inflation, unemployment and sanctions.
Oil production and exports: Oil is Iran's main source of revenue, and a rebound in production and exports is critical for the economy's recovery. Oil production stood at 3mn barrels per day on average in 2023. It is expected
to remain at the same level as long as sanctions remain in place. Exports stuck below 2mn bpd in 2023 and they are expected to remain at the same level in the new year, though much depends on the state of US sanctions against Iran.
The United States eased some of its sanctions on Iran's oil sector earlier in 2023. However, the souring Tehran-Washington ties following the
Israel-Hamas war, which broke out on October 7, could affect the
degree of enforcement of the sanctions in the year ahead.
The growth Iran’s economy has registered in 2023 owes largely to the rise in crude output. Other sectors of the economy remain largely in recession.
Government spending: The Iranian government is anticipated to increase spending in 2024, as it seeks to boost economic growth. The government is planning to increase spending on infrastructure, healthcare and import of basic food items like wheat, barley, rice, and corn to supply the growing domestic needs.
Inflation: Inflation is a major challenge for the Iranian economy. The inflation rate is expected to remain high in 2024, as it stuck around 45% in 2023.
Unemployment: Unemployment is another major challenge for the Iranian economy. The unemployment rate is expected to remain high in 2024, at around 12%. This is due to a number of factors, including the lack of economic growth, the large youth population, in addition to the sanctions.
Sanctions: Sanctions on Iran are a major obstacle to the country's economic development. The sanctions have made it difficult for Iran to trade with other countries, access international financial markets and invest in its economy.
2.0 Shift in fiscal strategy
The Iranian government anticipates tax revenues reaching IRR11,120 trillion ($21.38bn) in the upcoming fiscal year (March 2024-25), a figure twice the projected income from crude oil sales.
3 IRAN OUTLOOK 2024 www.intellinews.com