Iran's construction sector is expected to have expanded marginally by 0.7% in 2020 - down from the 8% growth in 2019.
A report by Research and Markets expects the country's construction output to expand by 1.8% in 2021, before registering an annual average growth of 3.3% between 2022 and 2025.
This will be supported by investments in the energy, oil and gas, petrochemicals, infrastructure and industrial sectors. In an effort to boost the economy and improve infrastructure, the Iranian government aims to complete over 3,900 km of new railroads and roads by March 2022.
The outbreak of the coronavirus pandemic, coupled with the steep decline in oil and gas prices, has weighed on the Iranian economy, which was already battered by the US sanctions that curb oil and gas exports, which are crucial for government revenues. The economic weakness amid the Covid-19 pandemic and the US sanctions, coupled with the depreciation of the currency and rising inflation, further weighed on the construction sector's output last year.
As a result of the sanctions, oil revenue in the country fell from over 1.6 quadrillion rials ($40 billion) in 2018 to less than 840 trillion rials ($20 billion) each in 2019 and 2020, according to the Central Bank of Iran.
Since early 2018, the value of the Iranian rial has fallen eightfold and inflation in the country has increased by at least 40% as of last year.
In a positive development, however, the change in the US administration is expected to relieve tensions between the US and Iran, as the new US President Joe Biden is in favor of returning to the Iranian nuclear deal, which was previously abandoned in 2018.
Despite this optimism, there have been delays in negotiation talks, as both countries wait for the other party to fulfil certain conditions.
In March 2021, the government announced that 323.2 trillion rials ($6.1 billion) will be invested in 62 projects in the industrial, mining and trade-related sectors.
During mid-March 2020 to mid-February 2021, the government also approved 135 foreign investment projects worth 96.5 trillion ($1.8 billion) in those sectors.
