Macroeconomic Forecast Iran

November 2006 | Macroeconomic Forecasts

Iran looks set to achieve a 7.52% current account surplus in 2006, only marginally higher than last year's 7.44%. This is largely based on rising oil export revenues - on account of high oil prices - which accounted for 81% of total exports last year. We expect these strong figures to tail off from 2007 however, given largely static oil production levels and easing oil prices. Imports on the other hand have been growing at a much slower rate, 7.25% y-o-y in 2005, down from 29.22 y-o-y in 2004. We expect import growth to pick up somewhat in 2006 and 2007, to 10.78% and 11.70% y-o-y, most likely constrained by the weakness of the riyal as well as faltering domestic demand. While the current account should remain in positive territory over the forecast period, an unexpectedly sharp downturn in oil prices poses a major risk to this outlook.

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