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EghtesadOnline: The Iranian economy enjoyed increased oil production and growth in the industrial sector during the three quarters of the last fiscal year that ended March 20, 2017.

However, the housing sector stagnation that started some three years ago continued well into the period under review. These were part of a quarterly report recently published by the Middle East Bank. Below are the details:


Following the uptrend in the fiscal March 2014-15 and March 2015-16, in the ninth Iranian month (ending Dec. 20, 2016), Iran’s crude oil production reached its maximum since the beginning of the 2010s.

According to OPEC reports, crude oil production averaged 4.01 million barrels per day in that month, indicating a 20% rise year-on-year. Although oil production in the following month fell slightly to reach 3.92 million barrels per day, given the recent OPEC agreement to raise Iran’s production by 90,000 bpd, it should rise back to 4.1 million bpd in the coming months, Financial Tribune reported.

Concurrent with the rise in production, the price of Iran’s crude oil reached $53.2 per barrel in the month ending Feb. 18, 2017, which is the highest since Aug. 21, 2015.

As shown in Figure 1, oil exports in the summer of 2016 (ending Sept. 21) was higher than in the spring of 2016(ended June 20) and reached 2.63 million bpd. Exports are expected to have risen further in the second half of the fiscal March 2016-17.


After a 0.3% contraction in March 2015-16, the “Manufacturing” sector resumed growth from March 20, 2016, and registered a 5.8% growth in the first nine months of the Iranian year, helped by a 6.8% rise in the production of large manufacturing establishments.

As shown in Figure 2, the production index of large manufacturing establishments experienced positive growth rates in that period and in the third quarter of the last Iranian year (ended Dec. 20, 2016) registered 102.0, which is its maximum since the beginning of March 2012-13.

The “Manufacturing” sector’s growth was mostly attributed to the 35.6% rise in the production of motor vehicles, thanks to the unused production capacity.

According to data released by the Ministry of Industries, Mining and Trade, the value of investment in the development of manufacturing units and the number of permits for launching manufacturing units rose by 49.5% and 8.8%, respectively, in the nine months of March 2016-17.


The housing market did not experience much fluctuation in March 2016-17, but its recession that had started in the second quarter of March 2013-14 continued.

The value-added of the “Housing” sector, which accounts for the bulk of the “Construction” sector, contracted in March 2016-17.

As shown in Figure 3, the average of real investments in newly-started buildings in the first and second quarters of March 2016-17 were lower than in the previous year’s corresponding quarters.

The number of construction permits grew by 7.7% in the nine months of March 2016-17, but that did not signal a boom in the market.

Since the data on the country’s housing market are released after several months, one has to rely on the available information on Tehran’s housing market.

Although the average price of a square meter of residential units in Tehran did not fall in March 2016-17, it rose at rates below the inflation rate and did not attract investors.

In real terms, the fall in the price of a square meter of residential units that had started in March 2013 has so far continued through March 2017.

Nevertheless, in the last quarter of March 2016-17, the average nominal price in Tehran showed increases of 2.4% and 7.5% from Q3 of March 2016-17 and Q4 of March 2015-16, respectively.

The monthly number of transactions in the housing market has been volatile. In monthly terms, between Nov. 21, 2016-Jan. 19, 2017, the number of transactions surged by more than 40% but fell again in Jan. 20-March 20, 2017, by 6.7% and 21.6%, respectively.

All in all, in the winter of the fiscal March 2016-17, the number of transactions in Tehran housing market experienced a 2.3% drop and reached 44,600.

Iran economy Iran Energy Iran oil Iran industry Iran energy sector Iran Industry boom Iran energy boom