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04-04-23

Iran's Foreign Debt Continues to Decline, Remaining Amongst the Lowest in the World

(MENAFN) According to the Fars news agency, Iran's foreign debt stood at approximately USD6.5 billion at the end of the tenth month of the past Iranian calendar year 1401 (January 20). This represents a significant decrease of 25.15 percent from USD9.067 billion at the end of the year 1400 (March 20, 2022). Out of the total foreign debt, USD4.7 billion was long-term debt, while USD1.8 billion was short-term debt.

External debt is a portion of a country's debt that is borrowed from foreign lenders, including commercial banks, governments, or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made. The ratio of Iran's foreign debt to GDP is very insignificant, and considering this figure, Iran remains among the countries with the lowest amount of foreign debt in the world, largely due to the U.S. sanctions and their consequent financial restrictions.

Foreign debt as a percentage of Gross Domestic Product (GDP) is the ratio between the debt a country owes to non-resident creditors and its nominal GDP. While having external debts is an important economic indicator globally, it is currently not significant for Iran, as the country has almost no foreign debt. This is due to the impact of U.S. sanctions, which have made it difficult for Iran to access international financial markets.

Iran’s external debt has been falling in recent years following a downward trend. This decrease can be attributed to the country's efforts to reduce its reliance on foreign debt and its focus on developing its domestic economy. As a result, Iran's foreign debt continues to decline, remaining amongst the lowest in the world. While foreign debt may not be a significant economic indicator for Iran at present, the country's efforts to reduce its reliance on external financing and develop its domestic economy are crucial for its long-term economic stability and growth.
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