Iran’s Statistical Center reported that real gross domestic product contracted by 10.1% in spring 2026 compared with the same period a year earlier, while the contraction stood at 4.6% excluding oil-sector growth.
The decline in output coincided with continued price increases. Iranian Central Bank Governor Abdolnaser Hemmati said the consumer price index in urban areas rose 3.9% during the Iranian month of Shahrivar, which ended in September this year, compared with the previous month.
Annual inflation slows
Hemmati said inflation compared with the same month a year earlier fell from 84.4% in Mordad to 83.8% in Shahrivar, which ran from August 23 to September 22 this year, marking the indicator’s first decline in 15 months, according to him.
But the monthly rate of price increases accelerated from 3.7% in Mordad, which ran from July 23 to August 22, 2026, to 3.9% in Shahrivar. The decline in year-on-year inflation reflects a slowdown in the pace of price increases, not a fall in prices.
The latest detailed data published by Iran’s Statistical Center showed that food and beverage prices rose 127.5% in Mordad from the same month a year earlier, while transport prices increased 104.8% and prices for housing, water, electricity, gas and fuel rose 37.2%. Rents alone increased by 31.8%.
Oil and gas behind most of contraction
The industries and mining group, which includes oil and gas extraction along with other activities, declined by 14.7% in spring 2026. The services sector contracted by 4.8%, while agriculture grew by 2.3%.
Detailed national accounts showed that the decline in oil and natural gas extraction contributed about 6.7 percentage points to the total contraction of 10.1%, accounting for nearly two-thirds of it.
Industry and investment decline
The decline extended to other activities, with manufacturing output falling 2.5% and gross fixed capital formation, one measure of investment, declining 8.4%.
Hemmati linked inflationary pressures to war, sanctions, the blockade and expectations of higher prices, while the output data quantify the decline by economic activity without isolating the share attributable to each cause.
