IMF Reports on Iran Economy

Small Contraction and Rising Inflation in 2012

The Iranian economy has shown a small contraction because of oil sanctions whose impact is spilling over into other sectors, the IMF said today. The projection also shows rising inflation in the country.

“The projection that we have shows small contraction in Iran economy during 2012 ... and an increase in inflationary pressure in the same period,” said the IMF’s director of Middle East and Central Asia, Masood Ahmed. (AFP, 11 Novemebr)

Mr. Ahmed made the remarks during his presentation of IMF’s Regional Economic Outlook on Sunday in Dubai. The contraction will be just under 1 percent in 2012.

“This deterioration reflects both lower oil production, which is in part because of the external constraints and the spillover impact of that on the rest of the economy,” Ahmed said.

IMF estimated Iran’s oil exports to have dropped to 1.25 million bpd this year compared with 2.14 million bpd last year.

Mr. Ahmed added, however, some sectors of the Iranian economy, such as agriculture, have done well. Iran, he pointed out, is not as dependent on oil as other oil exporting countries, with agriculture contributing some 10 percent of the GDP. He cautioned, however, that his projections have not take into account the sharp depreciation in Iran's currency, the rial.

“These projections were done before the very significant depreciation of the currency and the related increased uncertainty, which will likely have a further negative impact on the economic performance in the year ahead,” Ahmed said.

The IMF put Iran’s inflation this year at 25.2 percent, compared with 21.5 percent last year.

Iran’s Wheat Imports

Iran will import 1.7 million tons of wheat in in the current Iranian calendar year (March 2012/March 2013), the UN’s Food and Agriculture Organization (FAO) reported today. Wheat is the dominant cereal in the country, accounting for nearly 70 percent of total cereal production. Total cereal imports are forecast to remain high at 7.3 million tons, including maize, wheat and rice, the FAO report said.

Last March, the Iranian government bought 2.5 to 3 million tons of bread wheat on international markets, as private Iranian flourmills found they could not purchase in the face of sanctions. Iran’s state feed agency is also tendering to buy corn and soybean meal needed to feed the country’s livestock herds.

Iran's 2012 wheat output is preliminarily forecast to be 13.5 million tons.

Source: TradeArabia/Reuters, 21 April 2012

Iran Agriculture Grows by 33%

Iran's minister of agriculture, Sadeq Khalilian, told reporters in Tehran that the volume of the country’s agricultural products increased by more than 33 percent in the last Iranian calendar year (ending 20 March 2011). As a result, Khalilian added, the country’s import of agricultural products declined by 30 percent in the same period. It is estimated that the country’s production has reached a record 107 million tons per year, and the government has set the goal of reaching 200 million tons per year within the next four years.