Iran’s gross domestic product (GDP) officially contracted 3.5% y/y during the first quarter of the 2020/2021 Persian calendar year (March 20 to June 20), according to the Statistical Centre of Iran (SCI).
A double whammy of inflationary pressure exerted on the economy by the impact of heavy US sanctions and a severe coronavirus (COVID-19) outbreak wreaked havoc on the already struggling economy. Annual inflation is presently running at around 27%.
The economic contraction, excluding income accrued from oil products, stood at -1.7% y/y, the SCI also said.
Iran’s industry and services sectors shrank by -4.4% and -3.5% y/y, while agriculture saw a weak gain of 0.1% y/y.
Overall, the Iranian economy shrank by 6.9% in the 2019/2020 Persian calendar year, with the contraction at -0.5% excluding the oil products sector.
In that year, the agricultural sector experienced growth of 2.8% while the industry and services sectors shrank 14.7% and 0.7%, respectively.
In its June Global Economic Prospects report, the World Bank forecast that Iran’s GDP would expand 2.1% in 2021 after falling 5.3% in 2020.
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