Iran economy faces sharp contraction as GDP falls 10.1%

Data from the Statistical Center of Iran indicates a severe economic contraction during the first quarter of the Iranian calendar year. The nation's GDP fell by 10.1%, with a 4.6% decline when excluding the oil sector.

Key productive sectors experienced significant downturns: oil and natural gas activity dropped by 26.4%, industry and mining fell by 14.7%, services declined by 4.8%, and manufacturing contracted by 2.5%. Agriculture was the only major sector to show growth, increasing by 2.3%.

The crisis is compounded by high inflation, with a 12-month average reaching 69.9%, and significant currency depreciation, as the rial traded above 2.2 million to the dollar. Additionally, oil production saw a sharp decline, with OPEC data showing a drop of approximately 399,000 barrels per day in August. The economic downturn is attributed to a combination of sanctions, disrupted trade, declining domestic production, and the diversion of financial resources toward military and regional activities.