The International Monetary Fund (IMF) expects the Islamic Republic's net debt to reach 33.8 percent of its gross domestic product (GDP) in 2020, up 22.5 percent compared with the previous year.
IMF's report released on Wednesday, April 15, a day after the publication of its World Economic Outlook, says that Iran's GDP will be about $ 439.2 billion this year. Last year, that figure was nearly $ 491 billion.
Therefore, the net debt of the Iranian government is expected to reach over $ 148 billion in the current year.
Meanwhile, according to the report, the Iranian government's foreign debt this year will be 2.7 percent of total GDP, or $ 11.8 billion. Last year, that figure was about $ 10 billion, which incidentally is the same as in the Central Bank of Iran's (CBI) report.
A drop in economic growth, as well as the government's soaring debts, are highlighted at a time that Tehran has asked IMF for $5 billion emergency funding to fight coronavirus.
The IMF's estimate of $ 1.8 billion in the Islamic Republic's foreign debt growth this year shows that the international body does not anticipate seeing Iran capable of borrowing about $ 5 billion from the fund in 2020.
It is Iran’s first request for IMF aid since the early 1960s when the pro-West king, Shah Mohammad Reza Pahlavi ruled in Iran.
SEE ALSO: IMF Says Iran's GDP Will Decline By Six Percent In 2020In the meantime, IMF's director of the Middle East and Central Asia Department Jihad Azur has also told Reuters that "We have received a request for assistance (from Tehran), and since we have had limited engagement with Iran in recent times, the process of obtaining the information we require to assess the request takes time."
He also said it would take time to assess the situation in Iran and decide to lend to the Islamic Republic, due to a lack of interaction over the years.
However, President Hassan Rouhani's administration has insisted that the loan was needed urgently. At the same time, Washington has repeatedly asserted that it was against granting the loan.
Over the past forty years, Iran's economy has been severely damaged by inefficient management and widespread corruption, and Iran's share of the global economy has dropped from about two percent before the Islamic revolution to less than 1 percent.
U.S. sanctions and the outbreak of the coronavirus pandemic have exerted additional pressure on the Islamic Republic's economy. Under such pressure, IMF says Iran's economy is expected to shrink by six percent compared with the previous year.
Iran's economy shrank about 7.6 percent last year compared with 2018, and it was 5.4 percent smaller in 2018 than in the previous year.
Much of Iran's declining economic growth over the past two years has been due to U.S. oil export sanctions. The IMF estimates are based on the presumption that Iran will be able to sell 500,000 barrels of oil a day this year.
SEE ALSO: China Has Reduced Oil Imports From Iran, Zero Revenues For TehranHowever, Radio Farda's data provided by Kpler, an international data intelligence company that "provides transparency solutions to commodity markets", indicate Iran's crude oil exports in March were 144,000 barrels per day (BPD).
However, the IMF says Iran's gross domestic product, excluding crude oil, will drop by about 6 percent this year and the oil sector by nearly 5.9 percent.
Consequently, Iran's non-oil sector is also expected to fall sharply this year. Last year, Iran's non-oil sector dropped by only 1.2 percent and the oil sector fell by 34.5 percent, bringing the total gross domestic product down 7.6 percent, but this year the non-oil sector will also suffer severely.
The International Monetary Fund says the country's total exports, including oil, goods, services, etc., are expected to be only $ 46 billion in the current year, down nearly twenty percent from last year. The figure was close to $ 110 billion in 2017, a year before the U.S. imposed sanctions, which indicates that Iran's exports have fallen by more than half.
Imports are also expected to reach $ 64.6 billion, up more than eleven percent from last year. Thus, for the first time, Iran's imports will far exceed its exports.
Iran imported about $ 93.6 billion in 2017.
Based on the IFM estimates, this situation, along with other economic complications in the country, will cause Iran's foreign exchange reserves to fall to nearly $ 85 billion this year, down nearly nineteen percent from last year, and to $ 69.1 billion next year.