Iran has moved out of its three-year recession after recording two consecutive quarters of growth, the Central Bank of Iran’s (CBI’s) governor Abdolnasser Hemmati has announced on his Instagram account.

Officials have credited higher exports and a general realignment of the economy, necessitated by the impact of heavy US sanctions, with securing the new growth. It has come about, they say, despite the ongoing ill-effects of ex-American president Donald Trump’s “maximum pressure” campaign against Iran and the economic losses caused by Iran’s torrid experience of the coronavirus (COVID-19) pandemic.

“The positive growth in the second quarter of the current fiscal year [meaning the June 21-September 21, 2020 period of the 2020/2021 Persian year] recurred in the third quarter [September 22-December 20],” Hemmati wrote.

According to the CBI chief, Iran’s GDP expanded by 3.9% y/y in the second Persian year quarter, or by 2.9% y/y when crude oil is excluded.

“I can confidently say that today Iran’s economy has weathered tough sanctions and the recession that ensued has been repositioned on the path to growth,” he added.

A detailed report on Iran’s GDP growth in the third Persian quarter would be released by the CBI very shortly, the central bank governor said.

Earlier in March, the Statistical Centre of Iran (SCI) put the Q3 growth at 0.8% y/y, or 0.2% y/y excluding oil.

Sanctions drive

Trump’s sanctions drive against Iran kicked in halfway through 2018, a year that brought a GDP contraction of 6%, according to the World Bank. Things worsened in 2019 as the sanctions screw was tightened, with economic output falling 6.8%. The World Bank estimates it declined by 3.7% in 2020.

The World Bank has forecast that Iran will record a GDP expansion this year of 1.5%, followed by 2022 growth of 1.7%. Should Tehran manage to strike a breakthrough deal for the lifting of US sanctions with the Biden administration and should the coronavirus crisis be for the most part overcome in the Islamic Republic in the year ahead, the forecasts would likely be substantially upgraded.

Details of the SCI report on the Q3 growth show the agriculture sector enjoying a 5.5% expansion, industries and mining 3.7% and industries and mining excluding oil 3.1%.

The SCI added, however, that the services sector contracted by 1.8%, in part due to pandemic restrictions.

Meanwhile, construction, a subsector of industries and mining, expanded by 8.5%, the SCI noted.

The SCI report also showed Iran’s gross domestic product contracted by 1.2% y/y during the nine-month period to December 20 (Persian Q1-Q3).

The SCI assessments of the Iranian economy sometimes conflict with those of the CBI.