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IMF revises Iran’s 2021 economic growth projection to 2.5%

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
The seal of the International Monetary Fund is seen outside of its headquarters in Washington, DC on October 7, 2021. (AFP photo)

The International Monetary Fund (IMF) has lowered its expectation of Iran’s economic growth for 2021 by 0.7% to 2.5%, according to a latest document published by the Fund.

Tables in the IMF’s World Economic Outlook published on Tuesday projected thats Iran will end the current year with a lower-than-expected growth in gross domestic product (GDP), mainly because of the continued impacts of the US sanctions and the hit suffered to the economy from the coronavirus pandemic.

However, the international lender increased its estimate of economic growth in Iran for 2020 to 3.4%, up from a negative growth of 5% announced in a previous report.  

The IMF projected that Iran’s economy will continue to grow in 2022 by 2.0%, lower than an estimate published in July.

The report said that Iran’s inflation will decrease from a projected rate of 39.3% in 2021 to 27.5% next year. It estimated that consumer prices had risen by 36.4% in 2020.

Iran’s unemployment rate will remain relatively high, about 10.5% in 2022, up by half a percentage point against this year and near one percent higher than last year.

IMF’s projections showed that Iran’s current account balances would return to a positive growth zone by an increase of 1.3% expected for 2021 and by another percentage point forecatsed for next year. The indicator had dropped by 0.1% year on year last year.

Lowering growth figures was consistent for almost all countries and regions of the world in the IMF’s Tuesday report which was published just before a joint meeting of the IMF and World Bank. That comes as the report expected some resource-based economies like Saudi Arabia and Nigeria would benefit from a global recovery in demand for hydrocarbons.

The report said that inflation pressures and supply chain disruptions would continue to affect the global economic recovery from the coroanvirus in the next months.

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