Loud explosions shook Isfahan, renewing fears of impotence The Iranian Economy recovery, especially at a time when the World Bank expected that the gross domestic product would decrease to 3.2 percent this year, and that it would continue to decline until next year to 2.7 percent.
Iran’s economy depends on the oil, gas, and agriculture sectors, as well as manufacturing and financial services, and according to the World Bank, Iran ranks second in the world in terms of natural gas reserves, and fourth in terms of crude oil reserves. .
Despite this slight diversification of the economy that Iran is seeking, oil revenue remains the mainstay of its economy, and is therefore volatile due to US sanctions On his oil exports, as well as market prices that are affected by geopolitical tensions and decisions related to the reduction of oil production, which also affects the currency of Iran.
Water and energy shortages also led to a decline in the agricultural and industrial sectors, and a lack of oil revenues led to a growing budget deficit, which increased inflationary pressures in the country, and reached the level of -inflation in Iran 41.5 in 2023, according to statement. the latest refinitiv data.
While Iran’s economy was gradually recovering between 2021 and 2022, supported by the recovery of services after the Covid-19 pandemic, and increased activity in the oil sector, ending ten years of economic stagnation, it struck again when the conflict in the Middle East grew, as well as US sanctions.
After Iran attacked Israel with more than 200 drones and missiles, in response to the targeting of its consulate in Damascus, US Treasury Secretary Janet Yellen said she would impose new sanctions on Iran, which could harm export oil from Iran in the near future. .
American lawmakers are currently considering legislation that could impose measures on foreign ports and refineries that process oil in Iran, according to Reuters.
How is Iran’s economy holding up?
Days after the Iran-Israel escalation, the World Bank suggested in a report it released titled ( Conflict and Debt in the Middle East and North AfricaIran, which is considered one of the developing oil exporting countries, is affected by the conflict that is happening in the Middle East, explaining that it is vulnerable to economic risks. for geopolitical reasons, especially with the current tightening of US sanctions on oil exports.
He said that the issue will have a negative impact on the growth of the gross domestic product, expecting that growth rates will decrease annually from 4.7 percent in 2023, to 3.2 this year, and the slowdown will continue next year to reached 2.7 percent.
According to Refinitiv data, the decline in the Iranian economy may continue until 2028, with the GDP growth rate reaching around 1.9 percent.
The effect of tensions on foreign trade
Western sanctions had little effect on Iran’s oil trade with Beijing, as Iran had previously reported exporting more oil than at any time in the past six years, and Reuters cited data from the ship tracking company Vortexa, that there were oil exports here. Iran’s economic growth period is increasing by $35 billion annually.
China – the world’s largest crude importer and Iran’s largest customer – bought an average of 1.05 million barrels per day of Iranian oil in the first ten months of 2023, which is 60 percent more higher than the highest level recorded by Chinese customs before the sanctions in 2017.
For his part, a political economy expert, Ahmed Yassin, insisted that there would be a negative impact on Iran’s foreign trade. Geopolitical diseases In the area. In his interview with CNN Al-Eqtisadiah, he said that Iran has joined the economic blocs under the leadership of China and Russia, and that such trade relations are definitely very strong, and it is expected that they will grow significantly in the coming period.
He emphasized the importance of Iran’s strategic position for the international alliance between China, Russia and Turkey, and the aim of this bloc is to secure supply lines for new global trade through the Caucasus region, which ‘ end in Turkey the military developments that are taking place in the Red Sea region.
Trade in goods and services in Iran recorded 44.6 percent of GDP in December 2020, according to CEIC data.
Iran’s exports then grew 52.7 percent year-on-year to $71.6 billion in December 2021, according to CEIC data. Iran’s trade balance also recorded more than $22.7 billion in the same month.
Regarding imports, the latest Refinitiv data revealed the value in the first six months of 2022, amounting to approximately $28.2 billion, based on data from the Central Bank of Iran.
Therefore, the ability of Iran’s economy to stand depends greatly on whether the new Western sanctions are able to significantly reduce oil exports, thereby limiting its foreign relations.
2024-04-19 13:49:43
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