SCI Puts Iran's Q1 Growth at 1.7%

EghtesadOnline: Iran's economy grew 1.7% during the first quarter of the current fiscal year (March 21-June 21) compared with last year's corresponding period, the Statistical Center of Iran said it its latest report.

News ID: ۷۸۴۰۶۷

23 September 2018

The economy saw 1.9% growth without taking into account oil production, the report added.

SCI released the report a few days after the Central Bank of Iran put the GDP growth for the same period under review at 1.8%, including growth in the oil sector, and 0.7% excluding it.

The statistical center said "services" experienced the highest growth rate of 3.2% among the three major economic sectors. The "industry" group followed with 0.4%. Production by the agriculture sector shrank by 0.8%, Financial Tribune reported.

CBI said the services sector grew by 1.1% while the agriculture and industries and mines sectors grew by 0.3% and 0.1% respectively.

SCI and CBI both release periodic reports on Iran's macroeconomic data. The results, however, often differ due to different methods used in calculations.

Iran’s economy emerged from recession in the fiscal 2014-15 with a 3% growth after two years of recession when the economy contracted 5.8% and 1.9% back to back, the Central Bank of Iran said.

Growth in 2015-16 has been put at -1.6% by CBI and 0.9% by SCI.

CBI had put 2016-17 growth at 12.5% while SCI said it was much lower and near 8.3%.

The astronomical growth experienced in Iran after the removal of sanctions owed to a great extent to Iran's ability to increase oil sales.

Later, however, as crude output was ramped up and production capacity neared pre-sanctions levels, growth in the key sector slowed down.

With the United States having reimposed sanctions against Tehran lately and forcing other countries to stop importing oil from Iran, it is expected that growth in this sector will decline in the months ahead.

US President Donald Trump announced on May 8 his withdrawal from the nuclear deal and promised to return harshest sanctions against Iran.

The first round of renewed sanctions entered into effect on August 6. The unilateral US sanctions reimposed on August 7 prohibit Iran's purchase of US dollars and precious metals, part of a larger move that attempts to cut the country off from the international financial system.

A second tranche of US sanctions on Iran's oil and gas sector are set to go into effect on No. 4.

Many of Iran's oil buyers have already scaled back imports from the country.

Obviously, a decline in oil production, the main driving force behind Iran's economic growth, will translate into a sharp fall in overall GDP growth.