The Central Bank of Iran, in its latest report on the country's economic growth, said the gross domestic product during the first half of the current fiscal year (started March 20) grew 7.4% compared with last year's corresponding period.
According to the CBI report, most of the growth came from the oil sector.
Oil rose on Friday, edging closer to new 17-month highs, after Goldman Sachs boosted its price forecast for 2017 and producers showed signs of adhering to a global deal to reduce output, Reuters reported
Brent futures rose $1.19, or 2.2%, to settle at $55.21 a barrel, while US West Texas Intermediate crude rose $1, or 2%, to settle at $51.90 per barrel.
The Organization of Petroleum Exporting Countries agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1, its first such deal since 2008. Russia and other non-OPEC producers plan to cut about half as much.
Those deals, clinched over the past two weeks, have boosted expectations that a two-year supply overhang will clear soon and prices remain near highs last seen in July 2015.
The central bank report, however, does not elaborate on sector-by-sector growth rates, saying the details will soon be published.
Earlier, government spokesman and the head of Planning and Budget Organization–a government body tasked with drafting the budget, Mohammad Baqer Nobakht, said the government is forecasting a 7.7% GDP growth for the upcoming Iranian year (starting March 21, 2017).
Prior to the CBI report, latest data on economic growth was for the first quarter of the current fiscal year, whereby central bank governor, Valiollah Seif, put it at 5.4%. This is while the Statistical Center of Iran says the GDP grew by 4.4% in Q1.
CBI and SCI are both in charge of publishing periodic data on Iran's macroeconomic data, including economic growth, inflation and unemployment. The figures released by the two organizations often differ from one another.
The economy emerged from recession two years ago with a 3% growth. The rebound followed two years of recession when the economy contracted 5.8% and 1.9% back to back. The Iranian economy grew 0.9% in the last fiscal year, according to SCI.
Agriculture helped Iran from falling back into recession with a 5.4% rise in output. The services sector stalled, as it edged up in output by 0.2% compared to the previous year. Services, however, were far better than industries. The industrial sector contracted 2.2% during the year, as weak consumer spending and lack of adequate financing ate away at output.
The IMF forecasts that Iran's real GDP will grow by at least 4.5% in 2016-17. The World Bank forecasts 4.2% and 4.6% growth rates for Iran’s economy for 2016 and 2017 respectively.
The government has set an 8% annual growth target for the sixth five-year development plan (2016-21), mainly betting on growth in the oil sector.
The government submitted the budget bill for the next fiscal year to parliament earlier this month. The bill assumes larger revenues from taxes and petroleum sales, though the weaker exchange rate for the rial against the dollar will put next year's budget firmly below this year in dollar terms.
The total amount of the budget is 3,711 trillion rials, which puts it 10.6% over the 3,354-trillion-rial budget passed into law for the current year.
The government assumes a stronger dollar and a higher price for crude oil in the coming year's budget bill. It sets greenback's exchange rate at 33,000 rials, up from last year's 29,970 rials, and still far lower than its exchange rate of 39,600 rial per dollar in Tehran's markets on Sunday.
OPEC's third largest crude oil exporter is assuming an average oil price of $50 a barrel, up from the current $40.
With the $50 crude and 33,000-rial dollar, the administration expects a 1,100 trillion-rial revenue from petroleum sales, which includes exports of natural gas and condensates.
Each dollar was exchanged for 39,490 rials in Tehran as of Thursday.
