According to the IMF’s World Economic Outlook report released in October 2021, Iran is even ranked higher than regional countries such as Saudi Arabia and Turkey as two heavyweight economies, which are members of the G-20 group.

The statistics come as Iran has been under the heaviest illegal sanctions in history when Donald Trump officially withdrew the United States from the 2015 nuclear deal – JCPOA) – in May 2018 under his “maximum pressure” campaign against the Islamic Republic.

When Trump abandoned the JCPOA, his top hawkish diplomat Mike Pompeo said the U.S. will impose “the strongest sanctions in history” on Iran. Also in November 2018, John Bolton, who was the White House national security advisor at the time, said, “It’s our intention to squeeze them (Iranians) very hard… until the pips squeak.”

The Trump administration imposed as many sanctions as possible to the extent that his treasury secretary Steven Mnuchin announced that the U.S. is running out of options for more sanctions on Iran.

However, the data by the IMF proves that the illusions were wrong.

The chief reason may be that Iran has built an economy based on resistance with the least reliance on oil incomes. In other words, Iran has turned into a self-reliant economy with a primary focus on domestic capacities and knowledge-based companies.

The figures by the IMF show that 1-trillion-dollar GDP in the current year happened despite the fact that Iran has been among the hardest-hit countries by the Covid-19 pandemic in the world. The disease, among many malaises, also brought Iran’s income from tourism to nearly zero.

Facing political and economic pressure from the West, the Islamic Republic has also sought to develop economic and trade ties with Eurasian Economic Union countries.  It was also admitted as a member of the Shanghai Cooperation Organization (SCO) in September 2020. Through reliance on domestic capacities and developing ties with regional blocs, Iran has proven that the world is not just the West.

According to the report, Iran would be overtaking the Netherlands, Saudi Arabia, Turkey, and Switzerland in the top 20 list.

The United States and China would occupy the first two places in both methods’ GDP ranking.

It also said China will remain the world’s largest economy on a purchasing power parity (PPP) basis over the next few decades as 2nd ranked U.S. is growing slow and 3rd ranked India is way behind.

In the nominal GDP list, there would be no change in the top 10.

Among the top 50, the economic rank of South Africa would move up by eight positions, while Egypt would lose four places.

In the PPP ranking, there would be no change in the top 10 list. Other changes in the top 20 would be Taiwan overtaking Australia. Among the top 50, Ireland will climb three spots.

In the list of top 50, all economies will experience a positive growth rate in 2021. Ireland is the fastest-growing economy with 14.04%, followed by Chile (11.00%). Thailand has the lowest growth rate of 0.96%, followed by the United Arab Emirates (2.24%) and Japan (2.36%).

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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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According to WB, the United States and China are the world’s most powerful economies, accounting for 23.89 percent and 15.86 percent of the world’s economy, respectively, followed by Japan, Germany, Britain, France and India.

The data, however, indicates that the gap between China and the U.S. is gradually decreasing.

The world’s top 15 countries account for 75 percent of the total global GDP, which based on the WB report on global economy in 2018, amounted at $85.8 trillion.

Back in January, WB predicted a 1.1 percent GDP growth for Iran in 2020 and 2021.

The bank saw a -3.6 percent growth for the country’ GDP in 2019 but expected it to experience 1.1 percent of GDP growth in the following two years.

Global economic growth is projected to slow to 2.9 percent in 2019 from a downwardly revised 3 percent in 2018 amid rising downside risks, the World Bank said in its Global Economic Prospects report published that month.

The World Bank said the outlook for the global economy “has darkened” as global financing conditions have tightened, trade tensions “have intensified,” and some large emerging markets and developing economies have experienced significant financial market stress.

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