Publication: Iran Economic Monitor, Spring/Summer 2023: Moderate Growth amid Economic Uncertainty - With a Special Focus : The Gendered Impact of the COVID-19 Crisis on the Labor Market in Iran
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2023-08-22
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2023-08-22
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The Iran Economic Monitor (IEM) provides an update on key economic developments and policies. It examines these economic developments and policies in a longer-term and global context and assesses their implications for the outlook for thecountry. The IEM’s coverage ranges from the macroeconomy to financial markets to indicators of human welfare and development. Iran’s economy continued to grow moderately for the third consecutive year in 2022/23, albeit at a slower pace than in the previous year. Real gross domestic product (GDP) grew by 3.8 percent in 2022/23, driven by expansions in services and manufacturing. Despite sanctions, the oil sector also expanded, aided by the tighter global oil markets. Favorable weather conditions helped the agriculture sector to marginally grow after the contractionsin previous years. On the expenditure side, private consumption was the main driver of GDP growth. Government consumption contracted to contain the budget deficit following a sharp expansionary policy in 2021/22. Meanwhile, exports and importsboth increased, and strong investment in machinery drove investments up, while construction investment marginally improved. However, the economy continuesto face growth constraints notably related to the economic sanctions, restricted access to external markets and to the latest technology, and much needed foreign investment. The Special Focus of the report highlights the scarring effects of the COVID-19 pandemic, documenting the marked deterioration in labor market outcomes. Despite sizeable government interventions to sustain the economy, in the first year of the pandemic (2021/22), approximately 1 million Jobs were lost, and labor force participation contracted by 3 percentage points. Iranian women were the most affected: two out of three jobs lost between 2019/20 and 2020/21 were previously held by women. The gendered impact of the crisis contributed to widening Iranian’s women disadvantage in the labor market. Most importantly, the gains in femalelabor force participation slowly accumulated since 2011 vanished. Consistent with what is observed in other countries, women with young children were the most affected by the crisis. The combined effect of school closures and unequal intra-household allocation of care responsibilities, associated with prevailing gender norms, pushed Iranian women with children out of the labor force. Whether or not these trends will be reversed as the management of the COVID-19 pandemic is normalized and the economy recovers from the crisis remains an important policy question.
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“World Bank. 2023. Iran Economic Monitor, Spring/Summer 2023: Moderate Growth amid Economic Uncertainty - With a Special Focus : The Gendered Impact of the COVID-19 Crisis on the Labor Market in Iran. © World Bank. http://hdl.handle.net/10986/40243 License: CC BY-NC 3.0 IGO.”
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Thus, a private sector driven growth and investment reform agenda needs to be put in place immediately which can help Jordan manage turbulence and uncertainty better.Publication Iraq Economic Monitor, Spring/Summer 2023 - Reemerging Pressures(Washington, DC: World Bank, 2023-07-31)Iraq’s economy continued its recovery after the sharp, pandemic-induced recession in 2020 but growth constraints in the oil sector have reemerged. After moderating in 2022, consumer price inflation ticked up in early 2023, fueled by the depreciation of the Iraqi dinar in the parallel market. Fiscal and external account balances benefitted from the oil windfall in 2022 but this trend significantly moderated in early 2023. The new budget is excessively expansionary, and lacks the structural reforms that Iraq needs to develop a vibrant and sustainable economy. The economic outlook remains subject to significant risks, largely due to deep structural challenges. Urgent implementation of financial sector reforms and modernization of its banking sector architecture, currently major barriers to economic diversification, are a critical condition to bolster the private sector and unlock much-needed job creation. Financial access in Iraq is amongst the lowest in the world, with only 19 percent of adults owning a bank account, highlighting a significant underutilized source of financing. Crucially, lack of financing remains the top constraints for small and medium enterprises and firms operating in the informal sector, undermining private sector-led growth and job creation. As this report’s Special Focus highlights, this is in part due to the banking sector structure and operations, which is dominated by undercapitalized state-owned banks with weak institutional capacities that primarily provide financing to public sector entities and state-owned enterprises. 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The fiscal stance remains expansionary with only limited reform measures being included in the 2021 budget law after an extended deliberation in the Parliament. Higher oil revenues in tandem with the devaluation effect on those receipts are projected to narrow the fiscal deficit to 5.4 percent of GDP in 2021. Financing needs are forecast to remain elevated compared to pre-COVID-19 levels, averaging at 13.7 billion Dollars per year (7.5 percent of GDP) in the outlook period (2021–2023). The 2021 approved budget includes limited reforms such as new consumption taxes and better targeting of PDS transfers which are in line with the GoI white paper. If implemented they could help moderate the fiscal deficit and exchange rate pressures. However, more structural issues such as public wages and pension rigidities remain unaddressed.Publication Egypt : Economic Monitoring Note, Spring 2013(Washington, DC, 2013-03)The political situation in Egypt remains highly volatile and uncertain. The political environment is highly fragmented with increasing polarization between the Muslim brotherhood and other less organized factions that include secular and liberal parties as well as supporters of the former regime. At the same time, confrontations between the authorities and the judiciary continue to resurface. Following the controversial assumption of temporary exceptional powers, the president pushed forward a referendum on the new constitution in December which was approved by a small majority but with a low voter turnout. New Parliamentary elections were called in late February to begin in late April, but the election law was subsequently challenged in the courts. This will likely delay elections until August. Meanwhile, the key opposition parties have declared that they will boycott the elections.
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