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Iran: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
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 2011 represented almost 27% of the GDP, 90% of exports and 60% 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 is estimated at nearly 15% of the active population in 2011 (30% among the youth). The other major problem in the country is inflation which increases the prices of consuming goods, and this creates social problems and fears of public riots.
Growth (2.5% in 2011) should not exceed 2.2% in 2012, a figure lower than the regional average and insufficient to compensate the very high inflation (reaching 16.5% in 2012).
After the victory of the ultraconservatives in the legislative elections of 2012, internal tensions at the heart of the ruling powers have become apparent and there is a risk that they will further worsen the country's economic situation. Galloping inflation and rising unemployment lead the country's workforce, especially the young, to leave Iran.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 362.57 | 407.38e | 475.05e | 494.49 | 523.53 |
| GDP (Constant Prices, Annual % Change) | 3.5 | 3.2e | 2.5 | 3.4 | 3.8 |
| GDP per Capita (USD) | 4,923 | 5,449e | 6,260e | 6,419 | 6,696 |
| General Government Gross Debt (in % of GDP) | 8.9 | 11.6e | 9.2e | 8.0 | 7.1 |
| Inflation Rate (%) | 10.8 | 12.4 | 22.5 | 12.5 | 10.0 |
| Unemployment Rate (% of the Labor Force) | 11.4 | 14.6 | 15.3 | 15.6 | 15.7 |
| Current Account (billions USD) | 10.91 | 24.41 | 36.88 | 35.22 | 34.96 |
| Current Account (in % of GDP) | 3.0e | 6.0e | 7.8e | 6.7 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
Agriculture contributes nearly 11% to the GDP but employs one-third 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 10% of the GDP. Industrial and mining sectors contribute nearly 26% 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 nearly half 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.
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| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Iran Rial (IRR) - Average Annual Exchange Rate For 1 USD | 9,170.94 | 9,281.15 | 9,428.53 | 9,864.30 | 10,254.18 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: 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.
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Iran is a member of the Organization of Petroleum Exporting Countries (OPEC). The share of foreign trade (exports + imports) in the country's GDP is nearly 50%, with oil accounting for 80% of the exports income.
The top three export partners of Iran are: China, Japan 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 acts as a centre for reexport). 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 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 44,942 | 57,401 | 50,469 | 62,670 | 68,000 |
| Exports of Goods (million USD) | 88,733 | 113,668 | 78,830 | 100,900 | 131,000 |
| Imports of Services (million USD) | 14,760 | 17,240 | 17,380 | 19,438 | - |
| Exports of Services (million USD) | 6,791 | 7,863 | 7,470 | 7,531 | - |
| Imports of Goods and Services (Annual % Change) | 4.9 | - | - | - | - |
| Exports of Goods and Services (Annual % Change) | 2.8 | - | - | - | - |
| Imports of Goods and Services (in % of GDP) | 21.5 | - | - | - | - |
| Exports of Goods and Services (in % of GDP) | 32.2 | - | - | - | - |
| Foreign Trade (in % of GDP) | 53.7 | - | - | - | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Iraq | 5.5% |
| China | 5.3% |
| United Arab Emirates | 4.2% |
| India | 2.0% |
| Afghanistan | 1.6% |
| See More Countries | 81.5% |
| Main Suppliers (% of Imports) |
2010 |
| United Arab Emirates | 28.6% |
| China | 10.4% |
| Germany | 8.2% |
| South Korea | 6.7% |
| Turkey | 4.2% |
| See More Countries | 41.8% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
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Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: 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 is 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.).
Map of freedom 2010
Source: Freedom House
Note: 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: May 2012