While all signs and indicators point to rapid economic deterioration in Iran, officials continue to speak of a positive outlook for the economy. Defending his government’s budget for the next Iranian year (beginning March. 21, 2023), President Ebrahim Raisi has presented an economic picture that seems detached from reality. 

Addressing lawmakers on Jan. 22, Raisi spoke of 4% GDP growth, a 5% expansion in manufacturing, and the realization of his government’s plans in the field of employment. He is not alone in his apparent belief in these questionable projections. Deputy Foreign Minister for Economic Affairs Mehdi Safari believes that Iran is about to become a superpower. 

The underlying bet

The sentiments expressed by figures such as Raisi and Safari raise the question of whether there is a tangible development that is generating the apparent optimism about the trajectory of the economy. An in-depth analysis of recent statements by various political figures points to the vision of future economic impetus fully relying on the consolidation of trade and economic ties with eastern powers, especially China and Russia.

Indeed, ever since Iran in Sept. 2022 became a member of the Shanghai Cooperation Organization (SCO), officials have put a lot of emphasis on the associated economic dimensions. The argument is that de-dollarization of trade and the...