EghtesadOnline: Iran’s external debt declined to $8.67 billion by the end of third calendar month to June 21, data from the Central Bank of Iran shows.
The data, published on the CBI website, indicates a 7% decline in foreign debt compared to $9.33 billion reported at the end of last the fiscal year (March 19, 2019).
Medium and long-term debt stood at $6.96 billion, accounting for 60% of total foreign financial commitments in the period. The debts were to the tune of $7.18 billion by the end of last fiscal year.
The CBI also reported $1.7 billion in short-term debt by the end of first quarter of the current fiscal year, according to Financial Tribune.
Foreign debt in Iran increased to $10.91 billion in 2017 from $8.48 billion a year earlier. External debt averaged $16.13 billion from 1993 until 2017, reaching an all time high of $28.6 billion in 2007 and a record low of 5.1 billion in 2014, according to data from the Trading Economics website.
The ratio of Iran’s external debt to GDP is 2.5 for 2019-20 as reported by the World Bank, which is comparatively lower than many countries.
A comparison between Iran’s debt and those of developed countries shows the former’s foreign financial liabilities are largely insignificant and among the lowest in the world.
According to the magazine Global Finance, the United States, as the world’s largest economy, was the largest global debtor in 2017.
The US owed $18.3 trillion to foreign lenders in 2018, followed by the eurozone with $14.2 trillion and the United Kingdom with $7.4 trillion.
Most analysts believe that the reduced volume of foreign debt is not benign for economic prosperity because the foreign debt also reflects the strength of a nation’s economic ties with foreign lenders and international monetary institutions.
Likewise, low external debt may also represent a country’s inability to borrow from the international market.