Iran’s industrial sector fell back into contraction in October, reversing two months of modest expansion, according to the latest report by the Central Bank of Iran’s Monetary and Banking Research Institute. The industrial production index declined 2.1% year-on-year, marking a renewed downturn after positive growth in August and September.
The data, derived from production and sales reports of listed companies—representing about 42% of the output of large industrial firms—show that the 12-month growth of industrial production remained negative for the fifth consecutive month. Meanwhile, three-month growth, which had been gradually improving since June despite staying in negative territory, finally stabilized at zero percent in October.
Sector-level analyses reveal a mixed landscape. Pharmaceuticals and automotive industries were among the few to post positive growth, with pharmaceuticals being the only sector registering more than 1% expansion. In contrast, chemical products and non-metallic minerals industries recorded significant declines, exerting the largest drag on overall output.
Inventory patterns strengthen the interpretation that the latest contraction was driven primarily by supply-side constraints, particularly shortages of electricity and natural gas.
Industrial inflation also accelerated sharply, hitting a 40-month high of 41.6% in October. Inflation surpassed 50% in several segments, including paper, machinery, pharmaceuticals and electrical equipment, intensifying cost pressures across the industrial value chain.
The October data point to persistent structural bottlenecks and seasonal energy shortages that continue to weigh on Iran’s industrial recovery.
