Iran’s Economy Contracts for the Second Consecutive Month

According to the report Monitoring Iran’s Real Economy: Monthly GDP Estimate (July 2025), published by the Iranian Parliament Research Center, Iran’s monthly GDP in July 2025 contracted by 0.3 percent compared to the same month last year. Excluding the oil sector, the contraction was deeper at 0.6 percent. In June 2025, GDP growth was also negative, at -0.2 percent including oil and -0.5 percent excluding oil. This marks a reversal from 2024, when GDP growth stood at 3.1 percent with oil and 3 percent without oil.

Sectoral Performance of the Iranian Economy

The breakdown by major sectors shows that the ongoing energy crisis has severely affected agriculture. After posting 3.6 percent growth last year, the sector contracted by 4.7 percent in spring 2025 and by 8.1 percent in July. Industry and mining also slipped into negative territory, weighed down by structural imbalances and the 12-day conflict in June and July 2025, recording declines of 1.1 percent and 3.4 percent, respectively. In contrast, the oil and gas sector as well as services continued to expand, growing by 2.9 percent and 3.3 percent in July 2025.