Economy

1000 Rials bank note of the Shah era
1000 Rials bank note of the Shah era

Rank: 18th (PPP)[1]
Currency: 1 toman (superunit) = 10 Iranian rial (IRR) (Rialsymbol.svg) = 1000 dinar
Fiscal year: 21 March – 20 March
Trade organizations: ECO, OPEC, GECF, WTO (observer) and others
Statistics
GDP: $863.5 billion (2010 est.) (PPP; 19th), 337.9 billion (2010 est.) (nominal; 29th)
GDP growth: 3% (real growth; 2010 est.)
GDP per capita: $11,200 (2010 est.); (PPP; 99th)
GDP by sector: agriculture (11%), industry (45.9%), services (43.1%) (2010 est.)
GDP by component
Private consumption (36.4%)
Government consumption (10.3%)
Gross fixed investment (23.9%)
Exports of goods/services (34.6%)
Imports of goods/services (−19.7%) (2008 est.)[2][3]
Inflation (CPI): 11.8% (2010 est.)
Population
below poverty line: 18.7% living below $11/day (2006)[4]
3.1% living below $2/day (2006)[5]
Gini: index 38% (2008 est.)[6]
Labor force: 25.7 million (2010 est.); note: shortage of skilled labor
Unemployment: 14.6% according to the Iranian government (2010 est.)[7]
Main industries: petroleum, petrochemicals, fertilizers, caustic soda, car manufacture, pharmaceuticals, home appliances, electronics, telecom, energy, power, textiles, construction, cement and other construction materials, food processing (particularly sugar refining and vegetable oil production), ferrous and non-ferrous metal fabrication, armaments
Ease of Doing Business Rank: 129th (2011)[8]
External
Exports: $78.69 billion (2010 est.) f.o.b.
Export goods: petroleum (80%), chemical and petrochemical products (4%), fruits and nuts (2%), cars (2%), carpets (1%), technical services
Main export partners: China 16.58%, Japan 11.9%, India 10.54%, South Korea 7.54%, Turkey 4.36% , Pakistan 2.12% (2009)
Imports: $58.97 billion (2010 est.) f.o.b.
Import goods: industrial raw materials and intermediate goods (46%), capital goods (35%), foodstuffs and other consumer goods (19%), technical services
Main import partners: UAE 15.14%, China 13.48%, Germany 9.66%, South Korea 7.16%, Italy 5.27%, Russia 4.81%, India 4.12% (2009), Pakistan 3.31%
FDI stock:
Home: $16.82 billion (72nd; 2010)
Abroad: $2.075 billion (67th; 2010)
Gross external debt: $12.84 billion (31 December 2010 est.)
Public finances
Public debt: 16.2% of GDP (2010 est.)
Revenues: $96.94 billion (2009 est.) (on exchange rate basis, not PPP))[9]
Expenses: $93.04 billion (2009 est.) (on exchange rate basis)
Economic aid: $121 million (2008 est.)[10]
Credit rating: B for sovereign risk (June 2009)[11]
Foreign reserves: $100 billion (30 October 2010 est.)[12]

Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars

The economy of Iran is the eighteenth largest in the world by purchasing power parity (PPP) and it is predicted to become the 12th largest by 2015.[13][14] The economy of Iran is a transition economy with a large public sector and some 50% of the economy centrally planned.[15][16] It is also a diversifed economy with over 40 industries directly involved in the Tehran Stock Exchange.[17] Yet, most of the country's exports are oil and gas, accounting for a majority of government revenue in 2010.[18] A unique feature of Iran's economy is the presence of large religious foundations, whose combined budgets make up more than 30% of central government spending.[19] Iran is one of the few major economies that has maintained positive growth in the aftermath of the 2008 global financial crisis, despite sanctions imposed by the international community as a result of the country's nuclear program.[20][21]

Distortions resulting from a combination of price controls and subsidies, particularly on food and energy,[22][23] continue to burden the economy. Contraband, administrative controls, widespread corruption,[24][25] and other restrictive factors undermine the potential for private sector-led growth.[26] Although President Mahmoud Ahmadinejad has proposed replacing energy subsidies with targeted social assistance,[27] previous government-led efforts at reform, such as fuel rationing in July 2007 and the imposition of value-added tax (VAT) in October 2008, met with stiff resistance and violent protests.[28][29]

High oil prices in recent years have enabled Iran to amass $100 billion in foreign exchange reserves.[12][30] Whilst this has aided self-sufficiency and domestic investment, double-digit unemployment and inflation remain problematic.[31] Despite Central Bank of Iran figures showing that annual inflation rate has dropped,[32] the economy has seen only moderate growth. Iran's educated population, economic inefficiency, and insufficient foreign and domestic investment have prompted an increasing number of Iranians to seek employment overseas, resulting in a significant "brain drain".[33][34]

History

Prior to 1979, Iran's economic development was rapid. Traditionally an agricultural society, by the 1970s the country had undergone significant industrialization and economic modernization.[35][36] This pace of growth had slowed dramatically by 1978 as capital flight reached $30 to $40 billion US dollars just before the revolution.[37]

The government's long-term objectives since the revolution have been economic independence, full employment, and a comfortable standard of living for citizens, but at the end of the 20th century, the country's economy faced many obstacles.[38] Iran's population more than from doubled between 1980 and 2000 and grew increasingly younger. Although a relatively large number of Iranians are farmers, agricultural production has consistently fallen since the 1960s. By the late 1990s, Iran had become a major importer of food. At that time, economic hardship in the countryside resulted in vast numbers of people moving to cities.[37]

Following the nationalizations in 1979 and the outbreak of the Iran–Iraq War, over 80% of Iran's economy came under the control of the government.[19] After hostilities with Iraq ceased in 1988, the government tried to develop the country's communication, transportation, manufacturing, health care, education and energy sectors (including its prospective nuclear power facilities), and began the process of integrating its communication and transportation infrastructure with that of neighboring states.[39] The eight-year war with Iraq claimed at least 300,000 Iranian lives and injured more than 500,000. The cost of the war to the country's economy was some $500 billion.[40][41]

Notes

  1. ^ a b World Economic Outlook Database - Report for Selected Countries and Subjects. International Monetary Fund (2009). Retrieved November 29, 2010.
  2. ^ a b c "Annual Review". Central Bank of Iran. December 2009. Retrieved May 10, 2010.
  3. ^ a b c d e f g h i Memorandum – The foreign trade regime of the Islamic Republic of Iran. Ministry of Commerce (Iran) (2009). Retrieved April 8, 2010.
  4. ^ Djavad Salehi-Isfahani (August 5, 2008): "Has Poverty Increased in Iran Under Ahmadinejad?". Brookings Institute. Retrieved November 29, 2010.
  5. ^ Iran and the MDGs. United Nations Development Program (2003). Retrieved November 29, 2010.
  6. ^ Economic Trends. Central Bank of Iran (2008/2009). Retrieved July 4, 2009.
  7. ^ Iran's Unemployment Rate Hits 14.6%. Mehr News Agency, August 9, 2010. Retrieved September 24, 2010.
  8. ^ "Doing Business in Iran". World Bank (2010). Retrieved August 20, 2010.
  9. ^ a b "Crude price pegged at dlrs 39.6 a barrel under next year's budget". IRNA, January 27, 2008. Retrieved December 5, 2008.
  10. ^ "Iran at a glance". Development Economics, Development Data Group (DECDG). World Bank. March 27, 2009. Retrieved July 12, 2009.
  11. ^ "Iran: Sovereign risk". Country risk summary. Economist Intelligence Unit. 2008.
  12. ^ a b Iran Has Foreign Exchange Reserves Topping $100 Billion, Ahmadinejad Says. Bloomberg, October 30, 2010. Retrieved November 28, 2010.
  13. ^ Statistics, "World Bank" (2010), Retrieved January 30, 2011.
  14. ^ a b c Iran to be world's 12th economy in 2015. PressTV, December 24, 2010. Retrieved December 25, 2010.
  15. ^ Iran privatizes $63bn of state assets. PressTV, November 29, 2009. Retrieved January 28, 2010.
  16. ^ "A survey of Iran: Stunted and distorted". The Economist (2003)
  17. ^ "Iran offers incentives to draw investors". PressTV. April 26, 2010. Retrieved March 24, 2011.
  18. ^ Iran oil exports top 844mn barrels. PressTV, June 16, 2010. Retrieved June 16, 2010.
  19. ^ a b Bonyad-e Mostazafan va Janbazan Oppressed and Disabled Veterans Foundation (MJF). Globalsecurity.org. Retrieved February 6, 2011.
  20. ^ a b c Farnaz Fassihi: Iran's Economy Feels Sting of Sanctions. Wall Street Journal, October 12, 2010. Retrieved October 13, 2010.
  21. ^ Tehran exchange extends advance. Financial Times, August 25, 2010 (subscription required). Retrieved November 8, 2010.
  22. ^ "U.S. targets Iran's vulnerable oil". Los Angeles Times. 2007. Retrieved July 17, 2007.
  23. ^ a b "Energy subsidies reach $84b". Iran Daily. April 27, 2008. Retrieved March 28, 2011.
  24. ^ Iran falls to 168 in Corruption Perception Index. Transparency International (2009). Retrieved November 19, 2009.
  25. ^ Iran Country Report. Freedom House (2007). Retrieved October 29, 2009.
  26. ^ a b c d e f g h i j k l m "World Factbook: Iran's entry". Central Intelligence Agency. 2008. Retrieved November 6, 2009. This article incorporates text from this source, which is in the public domain.
  27. ^ New Plan Focus On Subsidies. Iran Daily, June 26, 2008. Retrieved July 23, 2010.
  28. ^ Iran VAT suspension stirs controversy. PressTV, December 16, 2008. Retrieved May 24, 2009
  29. ^ a b Gov’t Set to Change Economic Course. Iran Daily, June 24, 2008. Retrieved June 5, 2009.
  30. ^ Solomon, Jay; Farnaz Fassihi (October 23, 2010). "Iran to Pare Food, Gas Subsidies". Wall Street Journal: A8.
  31. ^ a b "Iran Inflation Rate". Index Mondi. 2009. Retrieved February 5, 2011.
  32. ^ Iran's inflation reaches four year low. PressTV, February 27, 2010. Retrieved February 27, 2010.
  33. ^ Frances Harrison (January 8, 2007). "Huge cost of Iranian brain drain". BBC News.
  34. ^ Gheissari, Ali (2009). Contemporary Iran: Economy, Society, Politics. USA: Oxford University Press. pp. 3–4 (Paperback edition). ISBN 0195378490.
  35. ^ a b Iran's Industrial Progresses (Part I). Iran National Film Centre (circa 1975). Retrieved January 20, 2010.
  36. ^ a b Iran's Industrial Progresses (Part II). Iran National Film Centre (circa 1975). Retrieved January 20, 2010.
  37. ^ a b Shirin Hakimzadeh. Iran: A Vast Diaspora Abroad and Millions of Refugees at Home. Migration information source (2006). Retrieved July 18, 2009.
  38. ^ Gheissari, Ali (2009). Contemporary Iran: Economy, Society, Politics. USA: Oxford University Press. pp. 7–8 (Paperback edition). ISBN 0195378490.
  39. ^ "Iranian Economy in Six Snapshots". Payam-e Emruz; Economic, Social, Cultural (Monthly). February 2001. Archived from the original on September 27, 2007. Retrieved July 17, 2007.
  40. ^ "Iran-Iraq war". Microsoft Encarta. 2008.
  41. ^ Iran-Iraq war (1980-1988). Globalsecurity.org. Retrieved October 21, 2009.

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