The Iranian economy is largely dominated by the public sector which controls nearly 80% of it. The private sector is therefore relatively limited. The economy is very dependent on the oil income, which in 2013 represented almost 80% of its revenues. In this context, an increase or a decrease in oil prices can have a great influence in the state's revenues. In order to diversify its economy and become less dependent of its oil sector, the government has decided to privatize and open to foreign investment most of the sectors of its economy. However, the progress on this issue has been slow and hampered by political tension and international sanctions related to the development of the national nuclear industry.
Reforms are nevertheless essential. The public sector no longer has the resources to create the jobs required to reduce the unemployment rate, which was 15% of the active population in 2013 (over 30% among the youth). The other major problem in the country is a huge inflation (26.5% in 2012 and more than 50% in 2013) which sharply increases the prices of consuming goods, and this creates social problems and fears of public riots.
The country is entering its second year in recession with a negative growth of 1.5% in 2013 and a forecast of -1.2% for 2014, a figure lower than the regional average and insufficient to compensate an inflation that may remain above 40% in 2014.
Galloping inflation and rising unemployment lead the country's workforce, especially the young, to leave Iran.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||541.11||398.03||367.10e||402.70||417.27|
|GDP (Constant Prices, Annual % Change)||3.9||-6.6||-1.9e||1.5e||2.2|
|GDP per Capita (USD)||7,200||5,237e||4||5,165||5,284|
|General Government Gross Debt (in % of GDP)||9.2||11.8||11.3e||11.2e||11.1|
|Inflation Rate (%)||21.5||30.5||34.7||19.8e||20.0|
|Unemployment Rate (% of the Labor Force)||12.3||12.2||10.4||11.6||12.2|
|Current Account (billions USD)||59.38||26.27||27.41e||17.01e||6.92|
|Current Account (in % of GDP)||11.0||6.6||7.5e||4.2||1.7|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
Agriculture has contributed to 10.6% of the GDP in 2013, employing 16.8% of the active population. Only 10% of the land is arable and primitive farming methods are still used. The main crops are pistachios (world largest producer), wheat, rice, oranges, tea, and cotton. Illicit cultivation of the opium poppy is fairly common. Iran is rich in mineral resources, mainly: oil (4th largest producer in the world), and gas (2nd place in reserves in the world), copper, lead, zinc, etc.
Oil production represents over 10% of the GDP. Industrial and mining sectors contribute 37.8% to the GDP. The textile industry is the second most important after the oil sector. Other major industries are sugar refining, food-processing, petro-chemicals, cement, and construction. Traditional handicrafts such as carpet weaving and the manufacture of ceramics, silk, and jewelry are also important to the economy.
The services sector contributes to 44.5% of the GDP.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||21.2||32.2||46.5|
|Value Added (in % of GDP)||10.2||44.5||45.3|
|Value Added (Annual % Change)||6.2||7.9||6.4|
Source: World Bank - Last Available Data.
|Iran Rial (IRR) - Average Annual Exchange Rate For 1 USD||9,864.30||10,254.18||10,616.31||12,175.55||18,414.45|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Iran is a member of the Organization of Petroleum Exporting Countries (OPEC), its second producer and the fifth producer in the world. The share of foreign trade (exports + imports) in the country's GDP is nearly 50%, with oil accounting for 60% of its revenues and 80% of its cash entries in 2013. But sanctions in place in 2013 prevented currency entry and also import-export from the private sector. Oil revenues were divided by two. the removal of these sanctions following the Geneva agreement in November 2013 was partial but should ease the economic tensions in the country.
The top three export partners of Iran in 2013 were: China, the UAE, Turkey and the European Union. Besides oil, Iran mainly exports pistachio nuts, carpets, petro-chemical products, organic chemicals, aluminum, and plastic materials.
Its top three import partners are: China, Germany and the UAE (which act as a re-export centers). The main goods imported are: machinery, iron & steel, electric & electronic equipment and cereals.
The Iranian population is young and foreign consumption goods are in high demand, which could offer a dynamic market for imports into the country. It is important to mention that a large part of these foreign products are smuggled into the country through Dubai.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||50,469||65,404||61,760||57,092||49,000|
|Exports of Goods (million USD)||78,830||101,316||130,500||104,000||82,000|
|Imports of Services (million USD)||17,380||18,153||16,347||6,512||-|
|Exports of Services (million USD)||7,470||8,657||8,396||6,512||-|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|United Arab Emirates||3.3%|
|See More Countries||85.7%|
(% of Imports)
|United Arab Emirates||26.6%|
|See More Countries||46.2%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2011|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude||64.6%|
|Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons||4.2%|
|Polymers of ethylene, in primary formsPolymers of ethylene, in primary forms||1.6%|
|Acyclic alcohols and their halogenated,...Acyclic alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives||1.3%|
|Cyclic hydrocarbonsCyclic hydrocarbons||0.9%|
|See More Products||27.4%|
|- bn USD of products imported in 2011|
|Iron and non-alloy steel in ingots or other...Iron and non-alloy steel in ingots or other primary forms (excl. remelting scrap ingots, products obtained by continuous casting and iron of heading 7203)||4.2%|
|Flat-rolled products of iron or non-alloy steel,...Flat-rolled products of iron or non-alloy steel, of a width >= 600 mm, hot-rolled, not clad, plated or coated||2.4%|
|Maize or cornMaize or corn||1.9%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||1.6%|
|Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.||1.5%|
|See More Products||88.4%|
Source: Comtrade, Last Available Data
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: October 2014