Iran's Economy Contracts 10.1% Amid War-Related Disruptions

Iran's economy contracted sharply in the first quarter of its calendar year, with GDP falling 10.1% from March 21 to June 20, 2026. The decline was attributed to a combination of factors, including the ongoing war between Iran and the US/Israel.

The energy sector bore the brunt of the contraction, plummeting by 26.4%. Industry and mining saw a decline of 14.7%, while services contracted by 4.8%. Manufacturing dipped by 2.5%, but agriculture was the only sector to show growth, increasing by 2.3%.

The sharp decline in oil production and exports has had a ripple effect on Iran's economy. Oil revenue supports foreign exchange earnings, which have been impacted by the war-related disruptions.