The share of oil in gross domestic product, budget and its contribution to export revenues is measured to determine a country's reliance on oil income, according to a report by Tehran Chamber of Industries, Mines, Trade and Agriculture.
The latest statistics released by the Central Bank of Iran shows oil revenues accounted for 19.6% of GDP in the first quarter of the current Iranian year (March 21-June 21).
Oil’s share in the Iranian government budget’s public revenues was at 37% in Q1 and 37.8% in Q2 (June 22-Sept. 22) while exports of crude oil and oil products constituted 66.3% of the country’s overall exports of goods and services and 71.5% of the country’s total exports in Q1.
Oil was the second biggest contributor to Iran’s GDP after the services sector in Q1. The services sector accounted for 53.5% of GDP during the first quarter, the industries sector for 11.8% and the agriculture sector for 9% of the country’s GDP.
The two-year high of 19.6% share of oil in GDP comes, as the ratio did not go beyond 14.5% during Q1 of the fiscal 2016-17 to Q4 of the fiscal 2017-18 (Dec. 22, 2017-March 20, 2018).
In Q1 of the fiscal 2017-18 and 2016-17, oil to GDP ratio stood at 13.9% and 12.5%, respectively. Oil revenues had the smallest share of 10.5% in GDP in the Q2 of the fiscal 2016-17.
The added value of oil sector contributed to 1.2% of the country’s economic growth in the first quarter of the fiscal 2018-19.
The share of oil revenues in the budget’s public resources has always been one of the most controversial issues in the political discourse. It is almost impossible to forswear oil revenues when drafting the country’s budget.
Yet, Iranian governments have tried to reduce the dependency of budget on oil sales. As a result, in recent years, they appear to have overcome the challenge of reducing oil revenues’ share in the budget to a certain degree.
In the fiscal 2011-12, oil made up close to half of government’s public budget while its share has reduced significantly in recent years, which could be partly attributed to the global decline in oil prices.
Oil to budget ratio was around 38% in Q2 of the current year (June 22-Sept. 22, 2018). The smallest and biggest shares of oil revenues in the country’s budget have been registered for the first quarter of 2016-17 and second quarter of 2017-18 with 10.4% and 39.1%, respectively.
Another key index for calculating the level of an economy’s dependency on oil revenues is the share of oil exports in a country’s total export revenues.
The oil sector accounted for about 71.5% of Iran’s total revenues from exports in Q1 of the current year, an unprecedented share since two years before. In Q1 of 2017-18, oil accounted for 66.5% of Iran’s exports of goods while in the first quarter of 2016-17, the ratio hovered around 61.6%-the smallest share during the period under review.
