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. The report also includes a Special Focus section on poverty and inequality in Iran at the onset of the COVID-19 pandemic.