Foreign debt was $6.3 billion by the end of the last calendar year (March), the Central Bank of Iran said -- almost 27.6% lower on the year before.
Medium and long-term debt was $4.5 billion or 71.5% of the total. Short-term debt was in the range of $1.80 billion, accounting for the rest. Short-term debt includes all commitment with original maturity of one year or less plus interest on long-term debt.
Thanks to the scale and scope of economic and financial hurdles, namely the US economic blockade, Iran’s external debt is far lower compared to most developing nations.
As such, Tehran was unable to attract foreign investment because of the tough economic sanctions, cumbersome laws and economic instability, among others.
Tehran’s external debt averaged $15.54 billion from 1993 until 2020, reaching an all-time high of $28.64 billion in 2007 and a record low of $5.1 billion in 2014, according to Trading Economics, which sources financial and economic data from countries across the world.
Most of Iran’s foreign borrowing in the last three years was related to fighting the coronavirus pandemic. Tehran received $50 million from the World Bank to help the health sector cope with the fatal disease.
Iran solicited multilateral development banks for funds, in which it is a member, namely the Islamic Development Bank and the Asian Infrastructure Development Bank.
Last year, the Organization for Investment, Economic and Technical Assistance of Iran said the World Bank would give $90 million to help cope with the pandemic.
IDR Data
The latest International Debt Report (IDR) by the World Bank Group shows Iran's foreign debt was $10.349 billion by the end of 2021. This was noticeably higher compared to the year before when it was $5.433 billion.
Iran’s long-term foreign debt reached $1.06 billion at the end of 2021, down from $1.313 billion reported in 2020. The data showed short-term debt rose to $2.508 billion in 2021 from $2.067 billion the year before.
The IDR, formerly International Debt Statistics (IDS), is an annual publication of the World Bank featuring external debt statistics and analysis for the 121 low- and middle-income countries that report to the World Bank Debt Reporting System (DRS).
The report put Iran's use of International Monetary Fund credit at $6.781 billion by the end of 2021, whereas it was at $2.054 billion in 2020.
Iran settled more than $254 million and paid $46 million in interest on its foreign debt in 2022, the group said.
As per the report, Iran's external debt stocks to export ratio stood at 13% in 2021, up by 3 percentage points on the year before. The short term to external debt ratio was 24% in 2021, considerably lower than 38% in 2020.
The IMF said Iran’s foreign debt in 2022 was estimated to equal 0.5% of the GDP and it is expected that the figure will remain unchanged in 2023.
Based on IMF data, the average ratio of foreign debt to total GDP for the countries of the region was estimated at 35.8%, while the figure for oil-exporting countries was reported to be 30.9%.
