The International Monetary Fund (IMF) has downgraded its outlook for Iran’s economy, projecting a 7.6% contraction in real gross domestic product (GDP) in 2026, according to its October 2026 World Economic Outlook.
The forecast reflects a sharp deterioration in the country’s economic outlook amid conflict, sanctions and regional disruptions.
The projected contraction marks a significant downgrade from the IMF’s July 2026 outlook, which forecast a 5.4% decline in Iran’s real GDP. The October projection is 2.2 percentage points lower.
The downgrade comes amid conflict-related disruptions, tighter sanctions and risks to oil production, exports and transportation. These pressures could weaken investment, domestic demand and government revenues. The IMF has also warned that prolonged conflict and renewed disruptions to energy production, shipping and critical infrastructure pose significant risks to economies across the Middle East and Central Asia.