Iran's economic growth in the first quarter of 2026 has reached a concerning figure of negative 10.1 percent. This statistic, which includes gross domestic product accounting for oil, reflects the dire state of production and economic activity in the country. Even without oil, economic growth reaches negative 4.6 percent, providing a clearer picture of the deeper problems in Iran's economy.
Severe Decline in the Oil and Gas Sector
According to published statistics, the growth of the oil and gas sector has reached negative 26.4 percent, while the industrial and mining sectors have also faced a decline of 14.7 percent. The services sector, which has a significant share in Iran's economy, experienced a negative growth of 4.8 percent this quarter. In contrast, agriculture is the only main sector of the economy that recorded a growth of 2.3 percent.
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Gross fixed capital formation with a negative decline of 8.4 percent and exports of goods and services with a decline of 35.7 percent worsen the situation. These figures indicate that the collapse of economic growth in spring 2026 may not be due to a temporary shock but rather related to the structural problems of Iran's economy.
Analysis of Investment Status
Albert Baghzian, an economic expert, stated regarding the negative economic growth of 10.1 percent in spring 2026 that calculations of gross domestic product and other macroeconomic statistics are largely based on estimates, and one cannot definitively comment on the accuracy of a specific number. He added that investment, gross domestic product, and exports have become severely vulnerable due to the conditions of war and sanctions.
Baghzian also pointed to the role of the exchange rate in reducing investment, stating that uncertainty leads investors to turn towards parallel markets. This economic expert noted that oil had previously acted as a sort of cover for economic growth figures, but now this sector is also facing serious problems.
Damage to the Industry and Trade Sector
Baghzian continued that almost no part of Iran's industry has escaped harm from the current situation. The automotive and petrochemical industries, in particular, are facing crises in securing parts and raw materials. Additionally, the conditions for exports to the UAE and regional countries have also been affected by these problems.
Ultimately, Baghzian emphasized that economic growth statistics should be examined more carefully, and for a more accurate judgment, long-term comparisons are needed. He noted that rising prices and growth in liquidity exacerbate existing problems, and one should not be shocked merely by observing a negative growth figure.
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