According to the Statistical Center of Iran, GDP shrank by 0.1% in the spring, ending 17 straight quarters of expansion. Industrial and mining output, which grew 5.9% last spring, fell to -0.3% this year, while agriculture plunged from +2.3% to -2.7%.<\/p>\n
Severe water and electricity shortages disrupted production across both sectors, hitting farms and factories alike.<\/p>\n
With the so-called snapback of international sanctions due on September 2, Iran faces a narrowing path to growth\u2014and a worrying prospect of rising unemployment and public discontent.<\/p>\n
Mounting debt<\/p>\n
A separate Central Bank report shows government debt to the bank surged 63% year-on-year as of June, reflecting the administration\u2019s failure to meet revenue targets.<\/p>\n
Officials say only 60% of projected revenues were generated in the first five months of the year, worse than in previous years and well short of the levels needed to stabilize public finances.<\/p>\n
Since 2018, when President Donald Trump withdrew the United States from a 2015 nuclear deal and reimposed sanctions, about a third of Iran\u2019s annual budget has gone unrealized.<\/p>\n
The IMF now estimates public debt at 37% of GDP and climbing. This trend is likely to accelerate if sanctions further limit oil revenues.<\/p>\n
Record capital flight<\/p>\n
The Central Bank also reported a net capital account of -$21.7 billion for the last fiscal year\u2014the highest on record and 2.5 times greater than in 2020.<\/p>\n
Capital flight has been accelerating since 2020, as businesses and households move assets abroad to escape currency depreciation and political uncertainty.<\/p>\n
The scale of outflows highlights both a collapse in investor confidence and the inability of the banking system to hold foreign exchange inside the country.<\/p>\n
Oil gains vanished<\/p>\n
Iran earned $66 billion from oil, petroleum products and natural gas exports last year, a 17% increase. Including non-oil goods, total exports reached $115 billion, $27 billion more than imports.<\/p>\n
On paper, that left the goods trade in surplus.<\/p>\n
But the services sector recorded a record $12 billion deficit, dragging the overall trade balance for goods and services down to just $13 billion.<\/p>\n
Combined with the $21.7 billion in capital flight, much of the hard currency generated by oil exports is effectively leaving the country.<\/p>\n
The result is sustained pressure on Iran\u2019s already fragile foreign reserves and further instability in the rial, which hit a record low of 1.08 million to the dollar on Thursday.<\/p>\n
The bottom line is that Tehran\u2019s extremely hard-gained oil cash is being wiped out by falling output, runaway debt and unprecedented capital flight\u2014leaving the country perilously exposed just as fresh sanctions loom.<\/p>\n","protected":false},"excerpt":{"rendered":"According to the Statistical Center of Iran, GDP shrank by 0.1% in the spring, ending 17 straight quarters…\n","protected":false},"author":2,"featured_media":163138,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-163137","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/163137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=163137"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/163137\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/163138"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=163137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=163137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=163137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}