Iran’s Parliament Research Center has forecast a recession of 2.6% to 5.5% by March, amid long-term economic problems and US sanctions.
The Center said that, if Iran’s oil exports have fallen 800,000 barrels per day, then the fall in GDP will be 2.6% for the year ending March 20. If the fall is 1.6 million bpd, then the GDP decline will be 5.5%.
Since April, Iran’s exports have dropped 1.4 million bpd, from 2.5 million bpd to 1.1 million bpd.
US comprehensive sanctions, including on the energy and financial sectors, were imposed on November 5. A sharper drop in Iran’s oil sales has been buffered, at least through March, by American sanction waivers on Tehran’s top purchasers — provided they reduce their intake of oil from the Islamic Republic.
For the 2020-2021 Iranian year, the Research Center forecasts a contraction of 4.5% to 5.5%.
Last week the center warned of “uncontrollable inflation” before the end of the current Iranian year. It cited “the quantity and quality of liquidity growth in recent years, fluctuations in the forex [foreign exchange] market, and price rises during recent months”.
The annual inflation rate is now more than 35%, compared to single digits at the start of 2018.
Iran is exporting more than 1.1m bpd but through smuggling and using traders.