UN: Iran's Economic Growth Dependent on Foreign Investment

The United Nations, in its latest report on the state of the global economy, has also referenced Iran's statistics. According to a report titled 'World Economic Situation and Prospects 2018,' published on the UN's official website, after a 12.5% surge in Iran's economic growth last year, it is expected that this indicator will reach 5.3% this year and remain at 5% for the next two years. The report adds that Iran's relatively good economic growth outlook in the coming years is contingent upon attracting foreign investments, as well as being influenced by significant political risks at the global level and some uncertainties. Two months ago, the U.S. President refrained from confirming Iran's compliance with the nuclear agreement and referred the decision regarding the future of the JCPOA to the U.S. Congress. Last week, Congress passed the ball back to the White House without making any decisions. The risk of potential U.S. sanctions or the country’s exit from the JCPOA has made Western companies, investors, and banks hesitant to cooperate with Iran. On Saturday, December 15, Reuters reported that the Chinese company 'CNPC' is likely to take over Total's share in South Pars. The two companies had signed a $5 billion contract with Iran's Ministry of Oil months ago to develop Phase 11 of South Pars, but Total, which holds more than half of the project’s share, is currently hesitant to proceed with work and investment due to the risk of U.S. sanctions. According to statistics from the United Nations Conference on Trade and Development (UNCTAD), the amount of foreign direct investment attracted to Iran's economy in 2016 was about $3.372 billion, which represents an increase of more than 64% compared to the previous year. This figure was about $3.050 billion in 2013. This data aligns with assessments from the World Bank. Iran itself claims that the total foreign direct and indirect investments attracted from 2013 to the middle of the current Iranian year is about $11.6 billion. The UN also adds in another section of its report that Iran has finally succeeded in bringing its inflation rate down to single digits in the past and current year, but this indicator is expected to peak again at 10.9% next year and reach 10.2% in 2019. This is while the average global inflation for this year is assessed at -0.2% and is expected to be -0.1% next year. The unemployment rate, which had decreased to about 10.5% in 2012 and 2013, has risen again since 2014 and has reached 11.3% over the past two years. The report states that after years, global economic growth has finally stabilized this year. Global economic growth is assessed at 3% this year, the highest figure since 2011. For the next two years, this indicator is expected to hover around 3%.