January 24-2014
The World Bank estimates that Iran’s economy shrank 1.5 percent in 2013 but will grow in 2014—however, only by an anemic 1.0 percent.
The World Bank puts Iran’s economy in 2013 as the worst in the region except for Syria, which is in virtual collapse as a result of the civil war, and Libya, which is struggling to recover from its revolution.
In its forecasts for 2014 and the following two years, the World Bank predicts Iran will continue to have the worst economic performance in the region apart from Syria, although Iran’s economy will be growing slightly.
The World Bank figures shown in the accompanying table cover the low- and middle-income countries of the Middle East and North Africa and exclude the high-income, oil rich countries like Kuwait and Saudi Arabia. Including those countries would likely show the Iranian economy in an even worse light.
The World Bank has tended to be optimistic about Iran’s economy over the years, so the forecast that its growth rate will be minuscule for the next three years is not comforting for the country.
The World Bank figures show Iran’s economy shrank 2.9 percent in 2012. But in September, the Central Bank of Iran said the economy shrank 5.4 percent in 1391, the Persian year that ran from March 21, 2012, to March 20, 2013, largely equivalent to 2012.
Some think the new Rohani appointees at the Central Bank put out overly negative numbers to make the Ahmadi-nejad Administration look bad and to make it easier for the Rohani Administration to show improvement quickly. But the September figures were in line with the US Treasury Department’s estimates for Iran’s economic decline in 2012. The World Bank did not say why it showed a number so very different from the calculations of Iran and the United States.
As the accompanying table shows, the World Bank recorded Iran as having the strongest regional economy except for Jordan in the first decade on this century.
In 2010, the Bank showed Iran with the strongest economy except for Lebanon.
The slide began in 2011, even before the harsh new sanctions were imposed by the United States and the EU in 2012. In 2011, the World Bank figures show Iran with a growth rate of only 2.2 percent, far less than half the rate of the previous 11 years. That put Iran right in the middle of the region, with five countries doing better and five worse. But that was the first year of the Arab Spring and the five countries doing worse than Iran were all disrupted by popular uprisings. In other words, Iran had the worst economy in the region of any country not politically disrupted in 2011.
In 2012, harsh sanctions were imposed and Iran’s economy shrank. The World Bank figures show it with the worst performance of any country except Syria in 2012, and the worst except for Syria and Libya in 2013.
