TEHRAN (Iran News) The GDP at base prices for the period amounted to 40,360.2 trillion rials ($51.58 billion) including oil revenues, suggesting a 29% growth in Iranian economy.

With oil revenues excluded, the country’s GDP stood at 37,034.1 trillion rials ($47.33 billion), indicating a 2.4% year-on-year growth.

The positive economic growth sustained through the first and second quarters of the fiscal year follows consistent growth throughout all quarters of the preceding year, signaling a continued recovery in economic activity across the country.

A Sunday report by the Statistical Center of Iran (SCI) indicated that Iran’s annual inflation rate for the calendar month to late December dropped to 32.5%, marking a 0.6 percentage point decline compared to the previous month.

According to the report, the Consumer Price Index (CPI) for households reached 285.1 in the month under review, reflecting a 2% rise compared to the previous month and a 31.4% increase year-on-year.

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The CBI put the GDP growth at 3.5 percent excluding oil, Tasnim News Agency reported.

According to CBI data, the GDP growth was positive in all four quarters of the previous year so that from the first quarter to the end of the fourth quarter of the said year, the economic growth rate of the country was 1.9 percent, 3.9 percent, 4.9 percent, and 5.3 percent, respectively.

As reported, based on the fixed prices in the Iranian year 1395 (ended on March 20, 2017), the country’s GDP stood at 15.15 quadrillion rials (about $30.7 billion) including the oil sector, and at 13.8 quadrillion rials (about $28.13 billion) excluding the oil sector in the past year.

Earlier this month, the World Bank (WB) in its latest report dubbed “Global Economic Prospects” estimated a 2.2 percent growth for Iran’s economy in 2023, a figure which is higher than the average growth forecast for the global economy and despite the fact that the country is still under sanctions imposed by the United States.

The bank has predicted that due to the contractionary monetary policy adopted by many countries this year, the average economic growth in the world is expected to decrease from 3.1 percent in 2022 to 2.1 percent in 2023.

Based on the WB report, Iran’s GDP grew by 4.7 percent in the last quarter of the previous year, while the average GDP growth for most of the advanced countries like the U.S., China, and many European countries was less than the said figure.

In terms of economic growth, Iran ranked 15th among the world’s 72 major economies in Q4 2022, which means that only 14 countries had higher economic growth than Iran in this period.

Iran’s 4.7 percent GDP growth in Q4 2022 was achieved, while the average economic growth of developed countries was only 1.2 percent in this period.

The U.S. economy grew by only 0.9 percent in the mentioned period, the Eurozone by 1.8 percent and Japan by 0.4 percent.

According to the WB data, Iran’s economy experienced a 2.9 percent growth in 2022; the average growth rate in West Asia and North African economies in 2022 was 5.9 percent.

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According to the mentioned report, Iran’s Gross Domestic Product (GDP) is going to continue its positive growth over the next two fiscal years (2022-2024), expanding by 2.2 and 2.3 percent, respectively.

“Despite an initial COVID-19 induced shock to GDP, a strong rebound in mid2020 led to a modest economic expansion in 2020/2021. The COVID-19 output loss since Feb 2020 was less pronounced [in Iran] than in other countries,” the report stated.

Based on the report, the inflation in the country will also decrease over the next three fiscal years. The bank sees the inflation to stand at 29.3 percent in the current Iranian calendar year (ends on March 21, 2022), while the figure is seen falling to 21.7 percent and 18.6 percent over the next two years.

The positive growth of the Iranian economy comes at a time when most of the countries around the world are facing sharp declines in their economic growth due to the negative impacts of the pandemic.

This achievement becomes more significant considering the fact that in addition to the negative impacts of the pandemic, the Islamic Republic has been tackling severe economic pressure imposed on the country due to the U.S. sanctions.

Back in January, the World Bank had predicted a 1.5 percent GDP growth for Iran in 2021.

“Growth in the Islamic Republic of Iran is expected to recover as domestic consumption and tourism begin to normalize, and disruptions related to COVID-19 taper,” the World Bank’s Global Economic Prospects (GEP) report released in late January stated.

In January 2020, the bank had predicted a 1.1 percent GDP growth for Iran in 2020 and 2021.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Secretary of the Association of Petrochemical Industry Corporation (APIC) Mr. Ahmad Mahdavi yesterday said that Iran’s revenues in petrochemicals in the past seven years have surpassed $110b,adding that customers of Iran’s petrochemical products have continued to buy even in the sanctions era.

Speaking in a press conference on the occasion of National Petrochemical Industry Day, Mahdavi said that since mid-March 2018 when NIMA forex system was launched, 75 percent of the forex resulted from the petrochemical products exports have been repatriated to the country and been offered at the NIMA system, and the remaining 25 percent has been spent for imports of catalysts and equipment and it has been in accordance with the government approvals.

He said petrochemical industry is the driving force of development and economic progress of the country, adding that all believe that attention to the rich hydrocarbon resources can save the national economy and will stop raw material sale.

Mahdavi added that Iran’s petrochemical production capacity will increase to $85m tons by the end of the year and the amount will be increased more next year.

He said this year the industry has distributed 700,000 tons more of its products in the domestic market and it has happened while the GDP growth has been negative, and if the companies had exported it, they would have earned $650m.

Mahdavi noted that 10 petrochemical projects with capacity of 17m tons will come on stream by the yearend and two more projects will come on stream by the end of next year, adding that there has been no halt in production or development in this sector and the progress has been significant.

He went on to say that the petrochemical sector has earned $110b in the past seven years, adding that  in the past seven years, the industry earned $76b through exports and some $30b of the products was distributed in the domestic market and the total earning has been around $110b.

Mahdavi reiterated that petrochemical sector ranks first in exports and repatriation of forex resulted from exports to the country and offering in the NIMA system.

He noted that next year the petrochemical production will reach 100m tons.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Minister of Finance and Economic Affairs Farhad Dejpasand says national economy is grappling with politicization and the only cure for it is the interaction and professional performance with calmness.

Speaking in the 100th meeting of Government Council of Dialogue With Private Sector, the minister said he definitely believes national economy is caught with politicization and the only solution for it is interaction and professional performance accompanied with calmness.

He added that all should talk in a way that their remarks become solution, adding remarks to please few people are not the solution.

Dejpasand went on to say that he is not to win hearts of the private sector or confront with while it is a serious economic part of the country, adding he believes  if the government opens the way for more effective activities of the private sector, then the country will obtain favorable results.

He claimed the current growth of non-oil exports of the country in the Coronavirus era is a proof for the effectiveness of holding these meetings.

He noted that maybe it would become hard to believe this fact that in the coronavirus era the national economic growth has registered a positive one based on the statistics of the Central Bank either with or without oil sales, but it is true.

Dejpasand added that fortunately some job losses which had happened in the first quarter of the year due to the pandemic were recovered later and the unemployment rate declined.

Touching upon some ambiguities regarding the next year budget plan, he pointed to some items in the budget bill and explained, calling for necessity of economizing and reducing expenditures.

He also reiterated that he is opposed to the idea of increasing the tax revenues for the next year government revenues, adding that since there is no specific definition for the new bases of getting taxes or reducing tax exemption, the increase in the tax will mean more pressure on the private sector in the coronavirus era.

He also hailed the performance of the Tax Affairs Organization last year in materializing 102 percent tax revenues and its over 100 percent of this year’s revenues without increasing pressure on the weaker layers of the society.

Dejpasand admitted that about 40 percent of the total GDP of the country is exempt from paying tax.

On the current ups and downs in the stock market, he said Securities and Exchange Organization dealt properly with 160 stock market publishers which had violated the rules and some of them were penalized.

He reiterated that the Securities and Exchange Organization is determined to bring back stability to the capital markets by taking proper measures.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Vice President and Head of Plan and Budget Organization (PBO) Mohammad Baqer Nobakht says Iran is fully ready to export 4.6m bpd of crude oil in case the sanctions are lifted by the U.S. but in the budget bill, it is predicted the country to sell between 1 to 2.3m bpd next year.

Speaking in a press conference yesterday, Nobakht revealed more details on the government’s budget bill which was submitted to Majlis on Tuesday. He said that according to the predicted revenues for the current year, the government was to earn 384,000b tomans in the first eight months of the current year but the earning in the mentioned period is 50,000b tomans shy of the set target.

He went on to say that the government payment and salary this year has been 53 percent more than last year, adding that whatever revenue the government has economized has been spent for the public livelihood.

Nobakht further said that development credits have increased by 65 percent, adding that this rise of the credit shows itself in forming investment in housing which has grown by 5.4 percent. He said the government has received only 19,000b tomans of petty cash from the central bank while it had authority to get 39,000b tomans.

He refuted allegations that the government has transferred its budget deficit to the Central Bank, adding that they are baseless remarks, as the government has only used 19,000b tomans of petty cash while it was allowed to get 39,000b tomans.

Nobakht reiterated that the GDP in all groups was positive in the summer and the country experienced positive growth 0.2 percent with oil sale. He noted although due to the coronavirus pandemic some jobs were lost, the growth in the agro sector was positive 2.7 percent and in mining sector positive 4 percent, admitting that the figure was minus 3 percent in the service sector without oil.

Nobakht said that the government predicts to earn 199,000b tomans through oil sales revenues and it will be possible if the country can sell 1 to 2.3m barrels per day, adding that if the oil exports miss the mentioned target, the government has to sell bonds or shares of the companies and factories.

He reiterated that the oil sale in the budget bill is flexible from 1 to 2.3 million barrels, reiterating that the government is optimistic to regain its OPEC quota in the market and in case it does not happen, it can sell bonds and shares.

Nobakht added that for the basic goods, the government eyes the price of dollar for 4200 tomans but all depends on the forex prices in the market.

He rejected the allegations that the government intentionally lets the dollar price go up in the market to compensate its budget deficit, reiterating that the government could do it with the dollar with price of 22,500 tomans and not with the price of 11,500 tomans which is to be the base price for the dollar in the budget bill next year.

Nobakht reiterated that currently and due to the devaluation of the dollar in the market, the capital market is witnessing growth.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Director General of the Arab-African States Department at Iran Trade Promotion Organization Farzad Piltan says the latest statistics released by Iran Customs Administration show that Iran’s exports to Syria have been around $73m in the first seven months of the current year while its imports from this Arab states have been around $10b in the same period.

Piltan said after the start of the political, security conflicts and violence in Syria, the trade volume between Iran and Syria nosedived and the volume fell to $105m in 2018. He added that Iran and Syria’s trade volume was around $550m in 2010 as Iran’s exports to Syria were around $520m while Syria’s exports to Iran stood at $30m.

He went on to say that despite the negative trend in the bilateral trade, their bilateral trade began growing once again and it bounced back to $170m last year as Iran’s exports were $160m and Syria’s share was $10m.

He noted that auto-parts, medicines, iron and steel bar, pipe and profile, gas turbine parts, powder milk for babies, pistachio, sanitary valves, sodium carbonate and yeasts have been the major exported items of Iran to Syria this year while Iran’s imports from Syria have been olive oil, fabric, fruit kernels and plants.

Piltan noted that in the field of exports of technical and engineering services to Syria, Iranian companies have exported services worth of $2.2b between 2008 and 2018.

Launching auto production line, building power sub-stations, water treatment plants, construction of bridges, construction of power plants, cement plants, designing and installing transformers, construction of flour plant and implementing water equipment have been of the major technical and engineering services which have been exported to Syria by Iranian companies, he noted.

Piltan also pointed to some economic indexes of Syria and opportunities and challenges in front of Iran’s exports to Syria, adding that Syria is a country with population about 18m people that 90 percent of them are Muslims. He reiterated that agriculture accounts for 20 percent of Syrian economy and its GDP, and services account for 20 percent of its economy.

He said that last year’s statistics were affected by the civil conflicts and the country’s GDP stood at $50b, and its GDP growth rate was minus 36 percent with an inflation rate of 25 percent and an unemployment rate of about 50 percent.

Piltan stated that Lebanon, Jordan, China, Turkey, Iraq and Tunisia have been the major trade partner of Syria in terms of exports to this country while Russia, Turkey and China were the major export destinations of Syria in 2019.

He said that Syria’s exports were valued at $309m and its imports have been around $4.3b in the same period.

He said coffee, tea, fruits and dried fruits, soap, detergents, dairy products, honey, cement and garment have been of the major exporting items of Syria.

Piltan reiterated that although the trend of trade cooperation between Iran and Syria has grown downtrend after the civil unrests, the damages on the infrastructures of Syria during the conflicts have caused a new opportunity for resumption of activities of Iranian technical and engineering companies for exports of their products to Syria.

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IRAN NEWS ECONOMIC DESK

TEHRAN – Iran’s economy could expand by as much as 4.4% in 2021 if U.S. President-elect Joe Biden lifts sanctions that have contributed to a deep three-year recession, the Institute of International Finance (IIF) trade body said on November 26, Reuters reported.

The coronavirus (COVID-19) crisis could, however, limit foreign investment even if it is green-lighted by Washington, it added.

Biden has said he will explore taking the U.S. back into the nuclear deal that Iran in 2015 struck with six world powers. Under that deal, sanctions were lifted in return for curbs on Iran’s nuclear development programme. However U.S. President Donald Trump pulled the U.S. out of the deal in May 2018 and went back to sanctions.

Iran’s rial currency has lost another 50% of its value against the U.S. dollar in 2020 to date, reflecting economic damage from the sanctions and the coronavirus pandemic, a third wave of which has taken hold in the Islamic Republic.

The IIF said that if the U.S. lifted most of the economic sanctions on Iran by the end of 2021, the Iranian economy could expand 4.4% next year following an expected 6.1% contraction in 2020.

It would then grow by 6.9% in 2022 and 6% in 2023, the IIF added. It also noted that if oil exports increase, Iran could see its foreign reserves rise to $109.4bn by the end of 2023. If Biden drops the Trump policy of using sanctions to block Iranian oil exports, Iran could be exporting around two million barrels of crude per day within a couple of years, according to some estimates.

Garbis Iradian, IIF’s chief economist for the MENA region, told Reuters foreign direct investment inflows into Iran would increase progressively from this year’s $890mn to over $6.4bn in 2025.

Assuming most sanctions could be lifted by late next year, FDI was likely to remain below $2bn in 2021, with most of the money coming from China, Iradian said, adding: “Moreover, the coronavirus pandemic will limit FDI inflows in 2021.”

The Iranian economy would remain fragile, though “not to the brink of collapse” if most of the sanctions remain in place, the IIF said.

Under such a “pessimistic” scenario, Iran would post 1.8% growth next year, while its foreign reserves would gradually fall from around $80bn this year to $46.9bn by end-2023.

Approximately 90% of Iran’s official reserves are frozen abroad due to U.S. sanctions.

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