Central Bank: Iran's Economic Growth at Four Percent in the First Half of 2014

The Central Bank of Iran announced in a report published on Wednesday, December 24, that the country's economy grew by four percent in the first half of the current year compared to the same period last year. President Hassan Rouhani, in a speech on the same day, considered this new statistic a sign of the 'beginning of economic recovery' in the country. The Central Bank's report states that based on data from statistical sources and preliminary estimates regarding the country's Gross Domestic Product (GDP), initial results indicate that in the first half of 2014, GDP increased from approximately 983 trillion rials in the first half of 2013 to 1,022,808 trillion rials in the first half of the current year. Iran's GDP growth at base prices was negative 2.4 percent in the second half of last year. The agricultural sector is the only major economic sector in Iran where the rate of economic growth has slowed down. GDP growth in Iran's agricultural sector was 6.9 percent in the first half of last year but has decreased to 3.2 percent this year. Meanwhile, the value added in the oil sector increased from negative 13.5 percent to positive 9.2 percent, the industrial and mining group from negative 6.3 percent to positive 7.2 percent, and the services sector from negative one percent to positive 2.5 percent. However, according to the details of the Central Bank's data, the pace of GDP growth in Iran in the second quarter of the current year was slower than in the first quarter. Iran's GDP grew by 4.6 percent in the spring and 3.7 percent in the summer. In this context, oil accounted for 17 percent, mining 20 percent, agriculture 13 percent, and services 50 percent of the country's GDP. In examining the growth of value added across various sectors, it is noteworthy that all major economic groups experienced positive growth in the second quarter of the current year, continuing the trend from the first quarter. The estimated four percent growth for the first half of the current year comes while the International Monetary Fund has assessed Iran's economic growth for 2014, which is one week from its end, to be around 1.5 percent. This is the first time in three years that Iran's economy has expanded. According to the Central Bank's estimates, Iran's economy has contracted by a total of 8.7 percent over the past two years. Iran's GDP was negative 1.9 percent last year and negative 6.8 percent the year before. Given the significant drop in oil prices in global markets that began in mid-summer of this year, it is still unclear how the 50 percent decline in oil prices this autumn will affect Iran's GDP. According to estimates from global organizations, including the International Energy Agency, Iran has exported about one million barrels of crude oil per day this autumn.