BAKU, Azerbaijan, May 1. The International Monetary Fund (IMF) has significantly downgraded its growth forecast for Iran, projecting gross domestic product (GDP) to rise by just 0.3 percent in 2025, down from an earlier forecast of 3.1 percent in October 2024, Trend reports.
Growth is expected to pick up slightly to 1.1 percent in 2026 but remains well below previous expectations.
According to the IMF’s latest regional outlook, Iran’s economy is estimated to grow by 3.5 percent in 2024, a modest downgrade from earlier projections. The sharp downward revision for 2025 reflects tighter international sanctions and extended voluntary oil production cuts under the OPEC+ agreement. These developments are expected to weigh heavily on both oil and non-oil sectors.
The broader Middle East and North Africa (MENA) region is forecast to grow by 2.6 percent in 2025, following a contraction of 1.8 percent in 2024. By comparison, Iran’s growth outlook remains significantly weaker.
The IMF also noted that non-oil growth in the region is likely to be constrained by reduced public investment and a gradual unwinding of expansionary fiscal policies. In Iran, inflation is expected to remain elevated despite a gradual moderation, while the country’s current account surplus is projected to narrow due to subdued oil activity and lower prices.
The IMF’s projections underline the ongoing challenges facing Iran’s economy, including external constraints and internal fiscal pressures.
