As if to emphasize the economic imperative behind new Iranian President Hassan Rohani’s diplomatic olive branch to the west, the latest data from the Statistical Center of Iran show that the economy contracted by 5.4% in the year ending on 20 March 2013. This estimate is far higher than the IMF’s figure of a fall in real GDP of 1.9% in 2012 and a projection of a further contraction of 1.3% in 2013. Reviving the economy which has suffered from sanctions and mismanagement, is therefore a main challenge for the new administration of President Rohani. The new Iranian administration is keen to turn the economy around and show tangible results sooner than later.

The oil sector has been badly hit by sanctions. Iranian oil exports have fallen to around 1mn b/d, less than half their pre-sanctions level of 2.2mn b/d, MEES analysis shows (MEES, 6 September). A recent statement by Iranian oil minister Bijan Zanganeh states that exports of crude oil and condensate currently stand at 1.209mn b/d and should soon rise to 1.3mn b/d, whilst closer to reality than previous official pronouncements, still looks optimistic. Iranian officials estimate the country’s oil revenue fell to around $70bn in 2012 from at $95bn in 2011 due to the effect of sanctions. (CONTINUED - 756 WORDS)