A salesperson’s briefcase is full of money at money exchange market on Ferdowsi Street, Tehran, Iran. [159][165] Operating everything from vast soybean and cotton farms to hotels, soft drink, automobile manufacturing, and shipping lines, they are seen as overstaffed, corrupt and generally unprofitable. By 2008, 73% of Iranians were covered by the voluntary national health insurance system. By 2013, Iran had $80 billion in foreign exchange reserves frozen overseas. [186] The official poverty line in Tehran for the year ending March 20, 2008, was $9,612, while the national average poverty line was $4,932. [37] The majority of heavy industries including steel, petrochemicals, copper, automobiles, and machine tools remained in the public sector, with most light industry privately owned. It is dominated by oil and gas production, although over 40 industries are directly involved in the Tehran Stock Exchange, one of the best performing exchanges in the world over the past decade. [309] Petroleum constitutes 56% of Iran's exports with a value of $60.2 billion in 2018. Meanwhile, skyrocketing prices, high inflation, growing unemployment, and shrinking purchase power has turned the people’s lives into misery. [363] Between 2010 and 2012, sanctions cost the E.U. 13th April 2021. Matthew Lynn: Are you brave enough to invest in Iran? – The foreign trade regime of the Islamic Republic of Iran, Judith Evans: Fund managers on the Iranian frontier, "Iran advances 41 places in industrial production". [157] According to then-President Mahmoud Ahmadinejad, 60% of Iran's wealth is controlled by just 300 people. [296] In 2010, Iran attracted almost $11.9 billion from abroad, of which $3.6 billion was FDI, $7.4 billion was from international commercial bank loans, and around $900 million consisted of loans and projects from international development banks. [336][337][338][339], Iran has held observer status at the World Trade Organization (WTO) since 2005. [333] The consumer-goods market is expected to grow by $100 billion by 2020. [218][219][220][221] Iran produced 1,395,421 cars in 2010, including 35,901 commercial vehicles. [358] Iran is increasingly using barter trade because its access to the international dollar payment system has been denied. [179] The World Bank reported that in 2001, approximately 20% of household consumption was spent on food, 32% on fuel, 12% on health care and 8% on education. “In 2021, the country’s economy is going toward a Venezuela-like situation,” said Hashemi, who was quoted by the state-run Khabar Fouri news website. [278][281][282] This figure is projected to increase to $3.65 billion by 2013. ), Oil production and consumption (1977–2010), More than two-thirds of the population (74 million people) are under the age of 30. [173] Youth unemployment (aged 15–24) was 29.1% in 2012, resulting in significant brain drain. More mini-markets and supermarkets are emerging, mostly independent operations. [141] As of 2013, only $30 to $50 billion of those reserves are accessible because of current sanctions. [228] Construction is one of the most important sectors accounting for 20–50% of total private investment in urban areas and was one of the prime investment targets of well-off Iranians. [32], Price controls and subsidies, particularly on food and energy,[33][34] are heavily prominent in the economy. Oil exports increased in 2016 and remained as high as 2.6 million barrels per day in April 2018. In SH 2020 (March 2020–March 2021), the economy is set to shrink markedly for the third straight year amid U.S. sanctions and lower oil production. [37] Urbanization contributed to service sector growth. Bonyads are a consortium of over 120 tax-exempt organizations that receive subsidies and religious donations. [196] Guild unions operate locally in most areas, but are limited largely to issuing credentials and licenses. [366], In January 2019, President Hassan Rouhani blamed the US for Iran's declining economy. The leading player is the Iran Insurance Company, followed by Asia, Alborz and Dana insurances. [145][146], The GDP of Iran contracted in FY 2018 and FY 2019 and modest rebound is expected in 2020/2021 according to an April 2020 World Economic Outlook by the IMF. [41] Inflation reached 41.1% in 2019, and is expected to continue "in the coming years" according to the World Bank,[38] but decline into the 34-33% range. [206], Large-scale factory manufacturing began in the 1920s. Iran’s economy is grounded and the people even poorer than before.” It is the world's eighteenth largest by purchasing power parity (PPP). [231] Iran has a large dam building industry. [295] In 2007, Iran had $62 billion in assets abroad. relating to Iran's economic development in the long run to envision the future of the country under plausible scenarios. A further decline in production occurred as result of damage to oil facilities during the Iraq-Iran war. Iran, January 22, 2021—Mohsen Hashemi, the head of Tehran’s City Council, warned on January 16 about the country’s worsening economic situation in 2021. [37] Women made up 33% of the labor force in 2005. ", "Ambitious modernization program for the Tehran Stock Exchange", Organization for Investment Economic and Technical Assistance of Iran, "Memorandum of the foreign trade regime of Iran", "The National Report on E-Commerce in Iran", "Science, Technology and Innovation Policy Review – The Islamic Republic of Iran", United Nations Conference on Trade and Development, "Iran: Concluding Statement of an IMF Staff Visit", "Regional Economic Outlook: Middle East and Central Asia", "Iranian Youth in Times of Economic Crisis", "Economic Prospects for the Middle East and North Africa Region", "Normalization of Economic Relations: Consequences for Iran's Economy and the United States", Carnegie Endowment for International Peace, Iran (including business etiquette information), Ministry of Economic Affairs and Finance Of Iran, Ministry of Industry, Mine & Trade of Iran, High Council of Iran Free Trade-Industrial Zone, Organization For Investment, Economic and Technical Assistance of Iran, U.S. Central Intelligence Agency: Iran's entry, Economist Intelligence Unit: Iran's entry, South Pars/North Dome Gas-Condensate field, National Iranian Oil Refining and Distribution Company, DESA - Iran Heavy Diesel Manufacturing Company, Organization of the Petroleum Exporting Countries, https://en.wikipedia.org/w/index.php?title=Economy_of_Iran&oldid=1021203503, CS1 maint: bot: original URL status unknown, Articles with dead external links from November 2016, Articles with dead external links from December 2016, Articles with permanently dead external links, Articles with dead external links from January 2021, Articles with dead external links from June 2016, All Wikipedia articles written in American English, Articles with unsourced statements from November 2020, Articles with unsourced statements from December 2020, Articles with unsourced statements from September 2016, Pages using Sister project links with default search, Creative Commons Attribution-ShareAlike License, industrial raw materials and intermediate goods (46%), capital goods (35%), foodstuffs and other consumer goods (19%), technical services, 8% on average (based on $1.1 trillion domestic and. Iran Khodro's Paykan, replaced by the Samand in 2005, is the predominant brand. [37], Article 44 of the Iranian Constitution declares that the country's economy should consist of state, cooperative, and private based sectors. Iran’s Economy Thriving despite Sanctions: Vice-President ‘Iran Emerged Victorious in US Economic War with Bare Hands’ $158m in Foreign Investment Went into Iran’s Free Zones in 9 Months [235] The sector accounts for 3% of exports. [citation needed] According to Goldman Sachs, Iran has the potential to become one of the world's largest economies in the 21st century. Most of Iran's financial resources are directed at trading, smuggling and speculation instead of production and manufacturing. "[27][28][29][30][31] Susan J. Campbell, Dearbhla McHenry (January 22, 2010): not supporting them by authorizing imports of similar parts or products into the country, Management and Planning Organization of Iran, Iran's wealth is controlled by just 300 people, Economic activities of the Revolutionary Guard Corps, Financial & monetary institutions services, United Nations Industrial Development Organization, List of military equipment manufactured in Iran, International Institute for Strategic Studies, fuel smuggling with neighboring countries, target prices set in the subsidy reform plan, Domestic oil and gas along with hydroelectric power facilities, Iran Travel and Tourism Organization (ITTO), Ministry of Information & Communication Technology, could be substituted by domestically produced products, one third of Iran's imported goods and exports, the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI), three decade-old US oil embargo against Iran, foreign exchange reserves frozen overseas, International Iranian Economic Association, Iran Chamber of Commerce Industries and Mines, Ministry of Economic Affairs and Finance (Iran), Ministry of Industries and Business (Iran), "The US, Israel, the Arab States and a Nuclear Iran. [191] In 2003, the government began to consolidate its welfare organizations to eliminate redundancy and inefficiency. [232], Mineral production contributed 0.6% of the country's GDP in 2011,[234] a figure that increases to 4% when mining-related industries are included. [312] [82], One major problem often cited by Iranian industrialists is that the government is not supporting them by authorizing imports of similar parts or products into the country, thus undermining their activity and domestic market. Contraband, administrative controls, widespread corruption,[35][36] and other restrictive factors undermine private sector-led growth. Technical and engineering service exports in FY 2007 were $2.7 billion of which 40% of technical services went to Central Asia and the Caucasus, 30% ($350 million) to Iraq, and close to 20% ($205 million) to Africa. [142] Iranian media has questioned the reason behind Iran's government non-repatriation of its foreign reserves before the imposition of the latest round of sanctions and its failure to convert into gold. [266] Following the 1979 revolution the new government reduced production. About one third of total cultivated land is irrigated. "A survey of Iran: Stunted and distorted". Iran Economy News. [190], Social security ensures employee protection against unemployment, disease, old age and occupational accidents. As a consequence, the Iranian rial lost more than 40% of its value between December 2011 and April 2012. The sectors that will be covered within the first phase of the project include economy, energy, water, environment, food and agriculture, and transport. Those prices are still well below target prices set in the subsidy reform plan, however. Primitive farming methods, overworked and under-fertilized soil, poor seed and water scarcity are the principal obstacles to increased production. Iran Eyes Cryptocurrency To Blunt U.S. Deterrents", https://www.bbc.com/news/world-middle-east-46075179, "Sanctions Cost Iran $60 Billion in Oil Investments, Burns Says", Sanctions an 'opportunity' for local companies: Iran, Sanctions should be taken as opportunity: Larijani, "IEA: Iran's oil exports fell, may slip further". [187] In 2010, Iran's Department of Statistics announced that 10 million Iranians live under the absolute poverty line and 30 million live under the relative poverty line. 43 religious organizations will receive 72.5 trillion rials in next year's budget. [41] The unofficial Iranian rial to US dollar exchange rate, which had plateaued at 40,000 to one in 2017, has fallen 120,000 to one as of November 2019. [57][58], After hostilities 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 integrating its communication and transportation systems with those of neighboring states. Iran operates the largest operational population of industrial robots in West Asia. Meanwhile, a fear of western penetration directs Iran’s politics, which complement its economic model of self-sufficiency. The UN Security Council imposed sanctions against select companies linked to the nuclear program, thus furthering the country's economic isolation. [93], Iran's budget is established by the Management and Planning Organization of Iran and proposed by the government to the parliament before the year's end. [41] ", "Blind subsidy system costing economy greatly", "Why Fuel Is Smuggled Out Of Iran And Why No One Stops It", "Preventing Iran's post-sanctions job crisis", "How the nuclear deal will help Iran's economy", "Iran's Neoliberal Austerity-Security Budget", "Iran's new budget to focus on privatization, subsidy reforms", "Iran Lures Investors Anticipating Nuclear Deal May End Sanctions", "Iran's bold economic reform – Economic jihad", "Where Did Iran's Islamic Economy Come From and Where Did it Go? [41] About 9% of Iran's land is arable,[198] with the main food-producing areas located in the Caspian region and in northwestern valleys. [52][53], The Imperial Bank of Persia was established in 1885, with offices in all major cities of Persia. [184] As the average Iranian household size is 3.5, this puts median personal income at around $8,185. [65] Iran exported $736 million worth of foodstuffs in 2007 and $1 billion (~600,000 tonnes) in 2010. Iran's economy had recently received a boost when the United States lifted sanctions in 2015. In this regard, Bahram Salavati, director of the regime's immigration observatory, said: "Although in the past, the focus was more on the departure of the talented, the educated, and arts and sports elites from the country, now the desire to leave Iran is rapidly spreading to different social classes. [264] In 2008 Iran paid $84 billion in subsidies for oil, gas and electricity. [262] Projections based on 1996 employment figures compiled for the International Labour Organization suggest that Iran's transport and communications sector employed 3.4 million people, or 20.5% of the labor force in 2008. In 2014 software exports stood at $400 million. Oil is also found in northern Iran and in the Persian Gulf. [365], The tentative rapprochement between Iran and the US, which began in the second half of 2013, has the potential to become a world-changing development, and unleash tremendous geopolitical and economic opportunities, if it is sustained […] if Iran and the US were to achieve a diplomatic breakthrough, geopolitical tensions in the Middle East could decline sharply, and Iran could come to be perceived as a promising emerging market in its own right. By 2004, annual oil production reached 1.4 billion barrels producing a net profit of $50 billion. It is under the control of the Supreme Leader, Ali Khamenei, and created from thousands of properties confiscated from Iranians. [337], According to NIAC, sanctions cost the United States over $175 billion in lost trade and 279,000 lost job opportunities. The government would retain the remaining 20%. Several commercial banks have branches throughout the country. Iran's unit of currency is the rial which had an average official exchange rate of 9,326 rials to the U.S. dollar in 2007. [290], Broadcast media, including five national radio stations and five national television networks as well as dozens of local radio and television stations are run by the government. [39][40], GDP contracted in 2018 and 2019 and modest rebound is expected in 2020. [207], Iran's major manufactured products are petrochemicals, steel and copper products. The economy is projected to contract by more than 2 percent in 2018/19 and 2019/20 before returning to a modest recovery path albeit from a smaller base. Other car manufacturers, such as the Bahman Group, Kerman Motors, Kish Khodro, Raniran, Traktorsazi, Shahab Khodro and others accounted for the remaining 6%. [147] In 2020, an Iranian businessperson complained to a foreign journalist (Dexter Filkins) that the uncertainty of "chronic shortages of material and unruly inspectors pushing for bribes" made operating his business very difficult -- “Plan for the next quarter? [259], In November 2019, Iran raised the gasoline prices by 50% and imposed a strict rationing system again (as in 2007). [310] Pistachios, liquefied propane, methanol (methyl alcohol), hand-woven carpets and automobiles are the major non-oil exports. Free trade zones such as Qeshm, Chabahar, and Kish Island are expected to assist in this process. The total value of transport and communications is expected to rise to $46 billion in nominal terms by 2013, representing 6.8% of Iran's GDP. Energy subsidies left the country one of the world's least energy-efficient, with energy intensity three times the global average and 2.5 times higher than the Middle Eastern average. Traditionally agricultural, by the 1970s, the country had undergone significant industrialization and modernization. Following the US pullout from an international nuclear deal with Iran and re-imposed sanctions, Iran faced the toughest economic situation in 40 years. Since 1979 strikes have often been met by police action. [274] These are especially popular in cities other than Tehran where the number of hypermarkets and supermarkets is still very limited. [32] The eight-year war with Iraq claimed at least 300,000 Iranian lives and injured more than 500,000. As of 2010, Iran also had the world's third largest number of bloggers (2010). The Jamaran News Agency wrote that the budget of 29.16 trillion rials for the State Television is more than the development budget of 20 provinces. But the next five years saw a dramatic change as the growth rates of the labour force [54][55] The pace slowed by 1978 as capital flight reached $30 to $40 billion 1980-US dollars just before the revolution. Tree-cutting is strictly controlled by the government, which also runs a reforestation program. The current account was expected to reach a surplus of 2.1% of GDP in FY 2012, and the net fiscal balance (after payments to Iran's National Development Fund) will register a surplus of 0.3% of GDP. In 1979, the government nationalized private banks. [355], According to U.S. [325] It is estimated that one third of Iran's imported goods and exports are delivered through the black market, underground economy, and illegal jetties, thus damaging the economy. World Bank on Iran: … [144], Money in circulation reached $700 billion in March 2020 (based on the 2017 pre-devalation exchange rate), thus furthering the decline of the Iranian rial and rise in inflation. [53], The banking system consists of a central bank, the Bank Markazi, which issues currency and oversees all state and private banks. [311] Copper, cement, leather, textiles, fruits, saffron and caviar are also export items of Iran. This growth continued until the mid-1970s when a sharp rise in inflation and a credit squeeze collapsed the boom. We see that today's negative and highly harmful and anti-social indicators, in the shadow of the wrong economic policies of the twelfth government, have inflicted rampant inflation on our economy, and such actions will lead the us to a catastrophic situation like in Venezuela,” wrote the state-run daily Jahene Sanat on November 30, 2020. [330], According to the head of the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI), in 2008 Iran ranked 142 among 181 countries in working conditions. Reza Malekzadeh, Azarakhsh Mokri, Pejman Azarmina: CS1 maint: bot: original URL status unknown (. Iran Economic Growth. Difficulty in accessing financing is also a major concern, especially for small and medium enterprises. The country's major oil fields lie in the central and southwestern parts of the western Zagros mountains. In the medium term, the economy is expected to undergo a period of stagflation until April 2020 as oil output continues to decline along with other mounting external economic challenges. [23][24] It is dominated by oil and gas production, although over 40 industries are directly involved in the Tehran Stock Exchange, one of the best performing exchanges in the world over the past decade. Non-food products include wool, leather, and silk. [199] The majority of the 300,000 tourist visas granted in 2003 were obtained by Asian Muslims, who presumably intended to visit important pilgrimage sites in Mashhad and Qom. [37] The budget for year 2012 was $462 billion, 9% less than 2011. [246] The country plans to increase hard-coal production to 5 million tons in 2012 from 2 million tons in November 2008. [215], As of 2001, 13 public and privately owned automakers within Iran, led by Iran Khodro and Saipa that accounted for 94% of domestic production. [52] Reza Shah Pahlavi (r. 1925–41) improved the country's overall infrastructure, implemented educational reform, campaigned against foreign influence, reformed the legal system, and introduced modern industries. [25][26] With 10% of the world's proven oil reserves and 15% of its gas reserves, Iran is considered an "energy superpower. [143] Overall fiscal deficit is expected to deteriorate to 2.7% of GDP in FY 2016 from 1.7% in 2015. Iran had an estimated Gross Domestic Product (GDP) in 2017 of US$447.7 billion, and a population of 80.6 million people. Popular tourist destinations are Mazandaran, Isfahan, Mashhad and Shiraz the looting of the world Outlook... 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