The International Monetary Fund (IMF) has predicted that Iran’s economic growth in 2025 will be nearly zero, with an inflation rate of 43.3 percent. This comes while Iran’s regime’s seventh development plan targets an eight percent economic growth rate—a target that regime supreme leader Ali Khamenei has deemed fully achievable.
The IMF updated its earlier global economic outlook in response to recent global changes, including the start of Donald Trump’s new presidential term. The IMF revised its previous global economic growth projection from 3.3 percent down to 2.8 percent, due to unprecedented U.S. tariffs.
Iran’s Economic Growth Halving, According to Central Bank Report
Part of the report addresses economic growth and inflation in Iran. While the IMF had forecasted Iran’s 2025 economic growth at 3.1 percent in its previous report about three months ago, the updated forecast slashes this figure to just 0.3 percent.
In autumn 2024, the Research Center of Iran’s regime Majlis (parliament) had forecasted that the country’s economic growth for the Persian year 1404 (starting March 21, 2025) would be between 2.5 and 2.8 percent, based on the regime’s draft budget for that year.
However, according to the seventh development plan, which spans from 1403 to 1407 (March 2024 to March 2029), the country’s economic growth is supposed to be around eight percent.
The 0.3 percent growth projection for 2025 is based on data provided by official institutions of Iran’s regime, such as the Central Bank.
On the other hand, while the 1404 national budget projects a 30 percent inflation rate, the IMF’s updated report puts Iran’s inflation for that year at 43.3 percent, creating a gap of 13.3 percentage points between the budget estimate and the IMF’s projection.
According to the latest official reports from Iran’s regime’s Statistical Center, economic growth in autumn 2024 reached 1.6 percent, marking the lowest level since winter 2021.
In addition to the new global economic phase predicted by the International Monetary Fund, the determining factor for Iran is the continuation of sanctions. These sanctions remain in place despite relative optimism regarding negotiations between the United States and Iran’s regime.
The impact of energy shortages has also put internal economic pressure on the country. In the industrial sector, electricity deficits and gas shortages have led to a significant reduction in the production capacity of both upstream and small-scale industrial units over the past year.
In the agricultural sector, the drought forecasted for 1404 may also have an impact. In the service sector and across all industries, sudden and unplanned shutdowns last year caused nearly a quarter of the 291 official working days (from March 21, 2024, to March 20, 2025) to be lost, with at least one province shut down on seventy-two days due to electricity or gas shortages.
The unplanned shutdowns of 1404 began with air pollution. Iran’s energy minister has warned that 1404 will be an even tougher year in terms of electricity shortages. According to estimates by non-governmental economic institutions, each unannounced shutdown costs the country around fifty trillion rials (five thousand billion tomans) per day—a substantial figure for an economy with a gross domestic product of approximately 405 billion dollars.
