Non-oil trade would play a key role in Iran’s economic growth

Business Materials 12 October 2017 18:08 (UTC +04:00)

Baku, Azerbaijan, Oct. 12

By Farhad Daneshvar – Trend:

There are strong signs in the latest report by the International Monetary Fund (IMF) indicating the significant role of the non-oil sector in giving a boost to Iran’s economy.

The IMF has forecast that Iran’s economy will experience a growth of 3.5 percent in 2017. According to IMF’s World Economic Outlook, Iranian economic growth in 2016 witnessed a huge surge of 12.5 percent. The report has projected the figure for the next year at 3.8 percent.

Many believe the huge surge of 2016 came following the implementation of Iran’s nuclear deal with the world powers followed by the removal of nuclear-related sanctions and a considerable hike in Iran’s oil output.

The report assumed that the price of oil will average $50.28 a barrel in 2017 and $50.17 a barrel in 2018.

Considering the OPEC plans to extend cuts in oil output and the fact that Iran is not expected to add a huge amount to its output over the coming year, the country is very unlikely to see a considerable change in oil revenue in 2017 and 2018.

Earlier on Wednesday, OPEC reported that Iran’s oil output registered a tiny increase in September by 9,000 barrels per day month-on-month, and stood at 3.827 million barrels per day (mb/d). During the sanctions era, Iran was producing 2.8 mb/d.

Given the abovementioned figures, it appears that non-oil sectors, including construction, agriculture and industry would play a crucial role in the country’s economic growth over the current and the next year.

Iran’s non-oil exports over the last fiscal year (started March 20) valued at $43.93 billion. The figure for the first half of the current year was $20.5 billion.