13 January 2023
19 February 2023

LEGAL UPDATE: December 2022

Prospects of Iranian Economy in 2023

According to International Monetary Fund (“IMF”), Iran’s Gross Domestic Product (GDP) will reach $1.7 trillion in 2023 which is a 2% increase compared to 2022. The inflation rate on the other hand, is predicted to be 40 percent and as the same as the previous year. Furthermore, IMF expects that the budget deficit of the Iranian government reaches six % of GDP in 2023, which is 1.8 % higher than that of 2022.

The government’s total revenues and incomes will remain unchanged in the following year. However, the government’s non-oil income will increase from 7.4 % of GDP in 2022 to 7.5 % of GDP in 2023. Additionally, IMF predicts that the Iranian government's gross debt will settle at 31.9 % of the GDP this year. The foreign debt of Iran which was estimated to be 0.5 % in 2022, will remain the same according to the IMF data.

Lastly, as claimed by IMF, Iran's foreign currency reserves will reach $42.2 billion which is a $11.4 billion increase compared to Iran’s available foreign currency reserves which is $30.8 billion in 2022. IMF has announced that Iran's foreign currency reserves are more than $120 billion, but unfortunately, Iran has access to only a small part of these reserves due to the U.S. sanctions.

Investment on New Trade Route by Iran and Russia

As reported by Bloomberg, Iran and Russia are investing around 20 billion USD to build up a trade route that connects eastern edges of Europe to the Indian Ocean. The route includes railway, auto routes and sea navigation (on Caspian Sea and rivers). The aim of this investment is creation of a route to counter the sanctions imposed by the West. As both countries are facing Western sanctions, they are inching closer with joint projects in transportation, oil and gas, and other sectors. Reaching to the Indian Ocean or “the Warm Seas” has always been a priority for Russia, and its importance has now increased with the emerging markets in Eastern Asia. Both Iran and Russia are looking eastward in order to counter the western sanctions. In order to gauge the viability of this route and realization of its intended benefits, one has to wait and see, as we are living in an era of geopolitical instability and shifts.

Iran Iraq Mutual Cooperation in medical areas

Health ministries of Iraq and Iran recently met in Iraqi capital, Baghdad and reached an agreement to boost medical cooperation between the two countries. Iraqi Minister of Health Salih Mahdi Motlab al-Hasnawi and his Iranian counterpart Bahram Einollahi agreed to form a bilateral committee to expand bilateral collaboration on procurement of medicines and medical equipment. Iranian Ambassador to Baghdad Mohammad-Kazem Al Sadegh also participated in the meeting.

This committee will be dedicated to treatment of patients, holding joint medical conferences, and training of medical and healthcare staff. Iranian health ministry officials have also mentioned that the joint committee will also be tasked with paving the way for collaboration of medical universities of the two countries as well as adoption of medical laws in support of healthcare system. Inauguration of branches of Iranian medical universities in the holy city of Karbala in Iraq is on the agenda of the committee.

It is worth mentioning that economic relations between Iran and Iraq are 12 times greater than Iran's economic relations with 27 member countries of the European Union.