Publication: Iran Economic Monitor, Spring 2024: Sustaining Growth Amid Rising Geopolitical Tensions
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2024-07-12
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2024-07-12
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The Iran Economic Monitor (IEM) provides an update on key economic developments and policies. It examines these economic developments and policies in a longer-term and global context and assesses their implications for the outlook for the country. The IEM’s coverage ranges from the macro-economy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policy makers, business leaders, financial market participants, and the community of analysts and professionals engaged on Iran.
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“World Bank. 2024. Iran Economic Monitor, Spring 2024: Sustaining Growth Amid Rising Geopolitical Tensions. © World Bank. http://hdl.handle.net/10986/41861 License: CC BY-NC 3.0 IGO.”
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Publication Iran Economic Monitor, Spring 2021(World Bank, Washington, DC, 2021-05)Iran’s economy witnessed a modest recovery in the second half of 2020 following more than two years of economic recession. Restricted access to foreign exchange reserves and limited other external financing sources translated to pressures on the exchange rate and higher inflation in 2020-2021. The Coronavirus (COVID-19) pandemic further intensified economic pressures on the most vulnerable. Iran’s economic outlook hinges on the evolution of the Coronavirus (COVID-19) pandemic, the pace of global economic recovery, and the possibility of easing of US sanctions. The economy is at a crossroads and urgently needs a recovery plan of comprehensive and coordinated macro-fiscal reforms. Growth-enhancing reforms such as investment in green infrastructure, digital economy, and renewable energy can help lead the economy out of the pandemic and create much needed jobs.Publication Iran Economic Monitor, Spring 2020(World Bank, Washington, DC, 2020-06-21)The recession in Iran accelerated in 2019-20 as United States (U.S.) sanctions further tightened. Inflation has gradually declined as the impact of the sharp depreciation of the rial in 2018-19 dissipated but foreign exchange reserves remain limited. The growing gross borrowing needs has increased the government’s reliance on debt issuance and withdrawals from strategic reserves. Negative economic growth and high inflation coupled with COVID-19 (Coronavirus) will put further pressure on household livelihoods in 2020-21. The current unique situation of Iran’s economy presents significant downside risks for the baseline macroeconomic outlook. The country’s economic and social challenges disproportionately impact the lower income decile households who have faced significant economic pressure. Any increase in the value of cash transfers, along with introducing targeting mechanisms, can help the poor cope with the social-economic shocks, but fiscal constraints may limit the scope for significant response.Publication Iran Economic Monitor, Spring 2022(Washington, DC, 2022-04)This Iran Economic Monitor (IEM) provides an update on key economic developments and policies as of Spring 2022. Iran’s economy continued its gradual recovery in 2021-2022 following the rebound in domestic and external demand. Despite a more accommodative fiscal policy in 2021-2022, higher oil and tax revenues have improved the fiscal deficit-to-GDP ratio. GDP growth is projected to remain modest in the medium term, as the economy remains constrained by both global and domestic gr owth bottlenecks. A more favorable global oil market outlook is projected to improve Iran’s fiscal and external balances. Iran’s economic outlook is subject to significant risks. Consumer price inflation accelerated due to a combination of supply-push and demandpull factors, adding to pressures on the welfare of lower-income households. Addressing long-term development challenges, including impending climate change shocks, requires a comprehensive package of economic reforms complemented by adequate social protection measures.Publication Iran Economic Monitor, Spring 2017(Washington, DC, 2017-06-30)The Iran Economic Monitor provides an update on key economic developments and policies over the past six months. It examines these economic developments and policies in a longer-term and global context, and assesses their implications for the outlook for the country. Its coverage has ranged from the macroeconomy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policy makers, business leaders, financial market participants, and the community of analysts and professionals engaged in Iran.Publication Iran Economic Monitor, Spring/Summer 2023(Washington, DC: World Bank, 2023-08-22)The Iran Economic Monitor (IEM) provides an update on key economic developments and policies. It examines these economic developments and policies in a longer-term and global context and assesses their implications for the outlook for thecountry. The IEM’s coverage ranges from the macroeconomy to financial markets to indicators of human welfare and development. Iran’s economy continued to grow moderately for the third consecutive year in 2022/23, albeit at a slower pace than in the previous year. Real gross domestic product (GDP) grew by 3.8 percent in 2022/23, driven by expansions in services and manufacturing. Despite sanctions, the oil sector also expanded, aided by the tighter global oil markets. Favorable weather conditions helped the agriculture sector to marginally grow after the contractionsin previous years. On the expenditure side, private consumption was the main driver of GDP growth. Government consumption contracted to contain the budget deficit following a sharp expansionary policy in 2021/22. Meanwhile, exports and importsboth increased, and strong investment in machinery drove investments up, while construction investment marginally improved. However, the economy continuesto face growth constraints notably related to the economic sanctions, restricted access to external markets and to the latest technology, and much needed foreign investment. The Special Focus of the report highlights the scarring effects of the COVID-19 pandemic, documenting the marked deterioration in labor market outcomes. Despite sizeable government interventions to sustain the economy, in the first year of the pandemic (2021/22), approximately 1 million Jobs were lost, and labor force participation contracted by 3 percentage points. Iranian women were the most affected: two out of three jobs lost between 2019/20 and 2020/21 were previously held by women. The gendered impact of the crisis contributed to widening Iranian’s women disadvantage in the labor market. Most importantly, the gains in femalelabor force participation slowly accumulated since 2011 vanished. Consistent with what is observed in other countries, women with young children were the most affected by the crisis. The combined effect of school closures and unequal intra-household allocation of care responsibilities, associated with prevailing gender norms, pushed Iranian women with children out of the labor force. Whether or not these trends will be reversed as the management of the COVID-19 pandemic is normalized and the economy recovers from the crisis remains an important policy question.
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Publication Comoros Country Climate and Development Report(Washington, DC: World Bank, 2025-06-18)The Union of the Comoros (The Comoros) has significant vulnerability to climate change-related risks but has considerable opportunities to strengthen preparedness and resilience against these challenges. According to the Notre Dame Global Adaptation Index, the Comoros is the 29th-most vulnerable country to climate change and the 163rd most ready to adapt (out of 191). The Comoros archipelago is exposed to many natural hazards that adversely affect the country’s natural capital, people, and physical infrastructure. In 2014, the economic cost of climate-related disasters was estimated at 5.7 million dollars annually, equivalent to 9.2 percent of Gross Domestic Product (GDP). Between 2018 and 2023, as many as 11 tropical depressions or cyclones impacted the country, with Cyclone Kenneth causing the greatest damage, equivalent to 14 percent of GDP, resulting in total economic growth falling from 3.6 percent in 2018 to 1.9 percent in 2019. More than 345,000 people (40 percent of the population) were affected by the cyclone, with 185,000 people experiencing severe impacts and 12,000 people displaced. However, there is an opportunity for the country to grow more robust and shock-responsive, and to establish pre-positioned funding mechanisms to enhance future crisis response efforts. For the Comoros, adaptation and climate-resilient development are the key climate change focus areas, with the country projected to face 836 million dollars 2050 in additional costs due to climate-related impacts. Current plans to adapt to the impacts of climate change in the Comoros include efforts to improve water management, strengthen coastal protection, and develop climate-smart agriculture practices. Given the country’s reliance on its natural resource base for economic growth and mobility, protection of these resources from climate change will be essential for promoting resilient growth and development. In addition to growing the adaptive capacity of the country’s natural resource sectors, strategic economic diversification will be important to help minimize future climate impacts, and development activities will need to be undertaken in such a way as to attract low-carbon co-benefits. The Union of the Comoros is committed to addressing climate change through its Nationally Determined Contribution (NDC) and national priorities. The country’s NDC (which was revised in 2021 for a ten-year horizon) sets ambitious targets, with a goal of reducing greenhouse gas emissions by 23 percent by 2030. The country also plans to significantly increase the share of renewable energy in its energy portfolio, reaching 33 MW by 2030. This will not only promote low-carbon development but also reduce the country’s dependency on imported oil and coal, which currently make up 95 percent of the energy mix. Additionally, the Comoros has declared its intention to increase CO2 removals by 47 percent by 2030, compared to BAU.Publication Myanmar Economic Monitor: Surviving, Not Thriving - Special focus on Myanmar’s Agrifood Industry Resilience and Adaptability(Washington, DC: World Bank, 2025-12-06)Economic conditions remain constrained due to the lingering effects of the March 2025 earthquake, ongoing conflict, subdued domestic demand, labor shortages, and persistent power outages. The recovery is fragile and uneven, with businesses and households directly affected by the earthquake continuing to face formidable obstacles. Only 45 percent of these firms have returned to pre-earthquake activity levels, with capital-intensive sectors such as manufacturing and agriculture lagging due to extensive physical damage, high reconstruction costs, and limited access to financial support. Household vulnerability and poverty have worsened. According to the September–November 2025 update of the World Bank’s Myanmar Subnational Phone Surveys (MSPS), the earthquake had a significant and enduring impact, affecting 16 percent of households nationwide and nearly 60 percent of households living close to the epicenter in Mandalay, Sagaing, and Naypyitaw. Consumption fell by nearly 2 percent nationwide, and poverty rates rose steeply in regions hardest hit by the quake. Only half of affected households have started repairs, with those in proximity to the epicenter being more likely to receive donor assistance. Losses of homes, assets, and jobs, especially in rural areas, have driven vulnerability, while informal work has increased in urban centers. Around 15 percent of households located near the epicenter experienced a loss of income or employment, highlighting the significant economic impact on people's livelihoods. Looking ahead, a moderate rebound of 3 percent is projected in FY2026-27, mainly driven by post-earthquake reconstruction, targeted support for affected sectors, and increased capital investment in public infrastructure. While recovery efforts are expected to stimulate growth in agriculture, services, and manufacturing, ongoing financing shortfalls, labor shortages, weak domestic demand, and structural bottlenecks are likely to restrain the pace and depth of economic recovery.Publication Kyrgyz Republic Country Climate and Development Report(Washington, DC: World Bank, 2025-11-03)This Country Climate and Development Report (CCDR) on the Kyrgyz Republic aims to support the country’s development goals amid a changing climate. The CCDR considers two policy scenarios up to 2050: the business-as-usual (BAU) and high-growth scenarios. As it quantifies the likely impacts of climate change on the Kyrgyz economy between now and 2050, the report highlights key government actions to best prepare for and adapt to climate impacts (referred to as “with adaptation” measures), with a particular focus on the time horizon up to 2030. The CCDR also outlines a path to net zero emissions by 2050 (referred to as “with mitigation” measures, “decarbonization,” or, simply, “net zero 2050”), highlighting associated development co-benefits.Publication Gabon Country Climate and Development Report(Washington, DC: World Bank, 2025-11-01)Gabon has a unique opportunity to drive inclusive growth, reduce poverty, and build a resilient post-oil economy, with climate action accelerating progress toward these goals. The country’s main development challenge is achieving higher growth and poverty reduction, as stronger growth is needed regardless of projected climate shocks to create jobs, raise living standards, and enable a viable post-oil economy. While pursuing growth-promoting economic reforms, climate action that prioritizes people must remain central to its development pathway. However, climate change risks exacerbating poverty and regional inequalities in a country already facing long-term challenges in expanding economic opportunities and basic public services, especially in rural areas. Climate shifts compound these challenges, making stronger private sector-led growth driven by reforms essential for resilience, diversification, job creation, and poverty reduction, though targeted investments in adaptation will still be required to mitigate climate shocks. Using a whole-of-economy approach, the Gabon Country Climate Development Report (CCDR) estimates that climate change impacts could result in GDP losses of 3.5 to 5.3 percent per year through 2050 compared to a business-as-usual baseline trajectory.Publication Jobs in a Changing Climate: Insights from World Bank Group Country Climate and Development Reports Covering 93 Economies(Washington, DC: World Bank, 2025-11-05)The World Bank Group’s Country Climate and Development Reports (CCDRs) provide a crosscutting look at how countries’ development prospects, and the job opportunities they offer to their people, can be threatened by climate impacts and supported by climate policies. Climate change and policies affect jobs through impacts on productivity, energy and material efficiency, and physical, human, and natural capital. They can also transform employment opportunities, especially through complementary measures that help workers and firms adapt to and benefit from new technologies and production practices. Prepared by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), CCDRs integrate country perspectives, climate science and economic modeling, private sector information, and policy analysis to assess how countries can successfully grow and develop their economies and create jobs despite increasing climate risks and while achieving their climate objectives and commitments. Each CCDR starts from the country’s development priorities, opportunities, and challenges, and is developed in close consultation with governments, businesses, and civil society, ensuring the recommendations reflect national priorities. By combining evidence on adaptation, resilience, and emissions pathways, CCDRs highlight where climate action can reinforce development and job creation, and where targeted policies are needed to manage risks and smooth labor market transitions. Taken together, these elements can help create local jobs, ensure economic transitions are just and inclusive, and equip workers and firms to navigate the disruptions and opportunities of a changing climate and changing technologies.