Excluding the share of oil sector from GDP, the figure stood at 2,899 trillion rials ($25.88 billion), which indicates a 0.3% growth year-on-year.
The breakdown of GDP for the three economic sectors shows only the services sector experienced growth with 2.3%. The two other sectors of agriculture and industry saw contractions of 2.5% and 1.2% respectively.
Marked Decline
The latest economic growth figures showed a marked decline compared to the previous data, Financial Tribune reported.
SCI's Q1 report showed the economy grew 1.7% during the period from March 21 to June 21 YOY. The economy registered a 1.9% growth in spring, excluding oil production.
The Central Bank of Iran's Q1 report registered a 1.8% growth including oil production and 0.7% excluding it.
SCI and CBI both release periodical reports on Iran's macroeconomic data. The results, however, often differ due to different methods used in calculations.
CBI has yet to publish its own report on growth rates for the first half of the current year.
For the first time, yet, both institutions put Iran's GDP growth at 3.7% for the last fiscal year (March 2017-18).
As for H1 last year (March 21-Sept. 22, 2017), GDP growth was put at 5.6% including oil and 6% excluding it by SCI and 4.5% by CBI including oil.
The central bank's H1 report for the last fiscal did not mention the growth by excluding the oil sector, only pointing out that the sector experienced the highest rate of 5.8% among other economic sectors.
IMF, World Bank Predictions
The International Monetary Fund, in its latest World Economic Outlook, predicted Iran's economy would contract this year and in the following year as a result of the reimposition of US sanctions against the Islamic Republic.
"Prospects for 2018–19 were marked down sharply for Iran, reflecting the impact of the reinstatement of US sanctions," reads the report on IMF's website.
US President Donald Trump announced on May 8 his withdrawal from the nuclear deal Iran had signed with world powers in 2015 and rolled out a new sanctions regime against Tehran, described as "toughest ever" in the following months.
"The downward revisions reflect to an important extent the worsening of growth prospects for Iran, following the reimposition of US sanctions. The economy is now forecast to contract in 2018 (1.5%) and especially in 2019 (3.6%) on account of reduced oil production, before returning to modest positive growth in 2020–23."
The first round of renewed US sanctions reimposed on Aug. 7 prohibits 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 sanctions on Iran's oil and gas sector took effect on Nov. 4.
Many of Iran's oil buyers have stopped or significantly scaled back imports from the country.
Imports of Iranian crude oil by major buyers in Asia hit their lowest in more than five years in November, as US sanctions on Iran’s oil exports took effect last month.
China, India, Japan and South Korea last month imported about 664,800 barrels per day (bpd) from Iran, down 12.7% from the same month a year earlier, Reuters reported citing government and ship-tracking data.
South Korea cut imports to zero for a third month in November while Japan followed suit. India’s November imports are down about 40% from October, the data showed.
Asia’s Iranian oil imports are set to rise from December after the United States granted eight countries waivers from sanctions against Iran’s oil exports for 180 days.
China’s Iranian oil imports rebounded to close to 390,000 bpd in November, up from about 247,000 bpd in October, the lowest in more than five years.
Sinopec, Tehran’s biggest crude buyer, resumed Iran oil imports shortly after China received its waiver in November while China National Petroleum Corp. will restart lifting its own Iranian oil production in December.
Japan and South Korea are preparing to resume Iranian oil imports in early 2019.
India is expected to restrict its monthly purchases of Iranian oil to 1.25 million tons, or 9 million barrels, during the waiver period from November.
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 CBI reported.
Growth in 2015-16 has been put at -1.6% by CBI and 0.9% by SCI.
CBI has put 2016-17 growth at 12.5% while SCI says 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 its oil sales.
Later, however, as crude output was ramped up and the production capacity neared pre-sanctions levels, growth in the key sector slowed down.
With the US reimposing sanctions against Tehran and forcing other countries to stop importing oil from Iran, growth in this sector is expected to further decline.
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.
The IMF report came after the World Bank said the Iranian economy is set to experience a downward trajectory in the medium term, as oil exports are expected to fall to half of their 2017-18 levels following the reintroduction of US sanctions.
The World Bank said the economy is expected to contract by 1.4% on average between 2017-21, experiencing a fall in exports and consumption on the demand side and a contraction of the industry sector on the supply side.
"Government balances are also expected to deteriorate, as oil revenues account for more than 40% of central government revenues. With the disruption of exports, the demand for US dollar to finance imports and savings is expected to rise and the parallel premium is likely to increase further than the current 150% gap between the official and parallel rates," the WB report said.
"Higher import prices from the devaluation are expected to push inflation back above 30% in the coming years, as inflationary expectations spiral and consumer sentiment falls, leading once again to stagflation in Iran. Despite the depreciation and drop in imports, the reduction in oil exports is estimated to almost eliminate the current account surplus, which is lower than the earlier UN sanctions episode as oil prices are almost half of the levels they were in 2012-13."
The World Bank report noted that the economy’s downward trajectory is also likely to put further pressure on the labor market and reverse recent job creation gains.