New World Bank forecast of Iran’s economic growth in 2025
reported Mehr News Agency, in a report entitled “Growing and Developing Economies in the 21st Century”, published in January 2025, the World Bank has analyzed the current conditions and predicted the economic future of the countries of the Middle East and North Africa. .
The part of this report, which is related to Iran, presents numbers that indicate a decrease in economic growth in the near horizon.
According to this report, the real growth of Iran’s economy, which was 5% in 2023 (1402-1403 AD), will reach 3% by the end of 2024. Of course, this figure of 3% is presented under the title of “estimate” because this year has just ended and changes may be made until the finalization of the national accounts. This estimate has decreased by 0.2 percent compared to the report that the World Bank presented in July of this year (June 2024).
According to the World Bank report, one of the important factors in this reduction can be the tightening of financial and monetary policies exposed to high inflation. Also, the decrease in foreign demand for oil, especially from China, and the slowdown in the growth of non-oil investments are factors that have probably affected Iran’s economic growth.
Of course, the World Bank had predicted the growth of 2024 and 2026 to be 0.2% higher than the current numbers in the report it presented in June. This change in forecasts may indicate more complicated economic conditions in Iran, or may indicate the receipt of new data based on which the World Bank has corrected its forecasts.
In general, this report shows that Iran’s economy will face a decline in growth in the near term, and forecasts also indicate the fact that economic growth in this country will be lower in the coming years. .
Also, the World Bank report mentioned that high geopolitical tensions and conflicts have caused insecurity in the Middle East and North Africa (MENA) region, especially in economies with Fragile and conflict-affected situations have increased. The economy of the West Bank and Gaza has been severely affected, with a significant number of people in Gaza facing severe food insecurity and malnutrition. Neighboring countries are also affected by the consequences of conflicts in the Middle East. Although a ceasefire agreed at the end of November 2024 has eased tensions in Lebanon, the conflicts have led to serious economic losses, with GDP expected to decline by at least 5.7% in 2024.
Also, according to the World Bank, economic growth in the Middle East and North Africa (MNA) region will remain at 1.8% in 2024, which is due to The activity of the oil sector is limited in oil exporting countries. The reason for this issue is the extension of the voluntary reduction in oil production, which was agreed upon in November 2023 between the member countries of the Organization of the Petroleum Exporting Countries (OPEC) and other affiliated oil producers (OPEC+).
In December 2024, these countries agreed to maintain their production cuts until the end of March 2025, roughly equivalent to the first half of April 1404, and then from April , that is, starting from May, gradually reduce it. In addition, the oil production cuts announced in April 2023 were extended again until the end of 2026 after being extended in June 2024 for a year until the end of 2025.
In the Gulf Cooperation Council (GCC) countries, including Saudi Arabia, economic growth has increased to 1.6 percent in 2024, which It was mainly due to strong non-oil activities, supported by a strong labor market and improved capital flows.
This decline is mainly due to tight fiscal and monetary policies in the context of high inflation. In Libya, economic activity is projected to decline by about 2.7 percent in 2024, largely due to previous political unrest.
Economic growth in Algeria is also down to 3.1% in 2024, which is mainly due to restrictions on oil activity caused by the OPEC Plus oil production quota. OPEC+) and the reduction of natural gas production.
