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The Economy of Iran

Iranian Economy

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Economy - overview: Iran's economy is marked by an inefficient state sector, reliance on the oil sector, which provides the majority of government revenues, and statist policies, which create major distortions throughout the system. Most economic activity is controlled by the state. Private sector activity is typically limited to small-scale workshops, farming, and services. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Significant informal market activity flourishes. Corruption and shortages of goods are widespread. President Mahmud AHMADI-NEJAD has proposed reforms to Iran's system of price controls and subsidies, particularly on food and energy. However, previous government-led efforts at reform - such as fuel rationing in July 2007 and the imposition of the Value-Added Tax (VAT) in October 2008 - were met with stiff resistance and violent protests. High oil prices in recent years allowed Iran to greatly increase its export earnings and amass over $70 billion in foreign exchange reserves. But with oil prices currently below $40 per barrel, the Iranian government is facing difficulties. Tehran has formulated a 2009 budget that anticipates lower oil prices. The government has drawn down the country's Oil Stabilization Fund, and may be dipping into foreign exchange reserves. Iran continues to suffer from double-digit unemployment and inflation - inflation climbed to 26% as of June 2008. Underemployment among Iran's educated youth has convinced many to seek jobs overseas, resulting in a significant "brain drain."

GDP:

GDP - real growth rate: 6.5% (2008 est.) 7.8% (2007 est.) 5.8% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 10.8% industry: 44.3% services: 44.9% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 2% highest 10%: 33.7% (1998)

Distribution of family income - Gini index: 44.5 (2006)

Inflation rate (consumer prices):

Labor force: 24.35 million note: shortage of skilled labor (2008 est.)

Labor force - by occupation: agriculture: 25% industry: 31% services: 45% (June 2007)

Unemployment rate: 12.5% according to the Iranian government (2008 est.)

Budget: revenues: $51 billion expenditures: $103 billion (FY09/10 est.)

Industries: petroleum, petrochemicals, fertilizers, caustic soda, textiles, cement and other construction materials, food processing (particularly sugar refining and vegetable oil production), ferrous and non-ferrous metal fabrication, armaments

Industrial production growth rate: 4.5% excluding oil (2008 est.)

Electricity - production: 193 billion kWh (2006 est.)

Electricity - production by source:

Electricity - consumption: 145 billion kWh (2006 est.)

Electricity - exports: 2.775 billion kWh (2006 est.)

Electricity - imports: 2.54 billion kWh (2006 est.)

Oil - production: 4.7 million bbl/day (2007 est.)

Oil - consumption: 1.6 million bbl/day (2007 est.)

Oil - exports: 2.8 million bbl/day (2007 est.)

Oil - imports: 210,000 bbl/day (2007)

Oil - proved reserves: 138.4 billion bbl based on Iranian claims (1 January 2008 est.)

Natural gas - production: 111.9 billion cu m (2007 est.)

Natural gas - consumption: 111.8 billion cu m (2007 est.)

Natural gas - exports: 6.2 billion cu m (2007 est.)

Natural gas - imports: 6.1 billion cu m (2007 est.)

Natural gas - proved reserves: 26.85 trillion cu m (1 January 2008 est.)

Agriculture - products: wheat, rice, other grains, sugar beets, sugar cane, fruits, nuts, cotton; dairy products, wool; caviar

Exports: $106.4 billion f.o.b. (2008 est.)

Exports - commodities: petroleum 80%, chemical and petrochemical products, fruits and nuts, carpets

Exports - partners: China 15%, Japan 14.3%, Turkey 7.4%, South Korea 7.3%, Italy 6.4% (2007)

Imports: $67.79 billion f.o.b. (2008 est.)

Imports - commodities: industrial raw materials and intermediate goods, capital goods, foodstuffs and other consumer goods, technical services

Imports - partners: China 14.2%, Germany 9.6%, UAE 9.1%, South Korea 6.3%, Russia 5.7%, Italy 5% (2007)

Debt - external: $21.77 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: Iranian rials (IRR) per US dollar - 9,142.8 (2008 est.), 9,407.5 (2007), 9,227.1 (2006), 8,964 (2005), 8,614 (2004) note: Iran has been using a managed floating exchange rate regime since unifying multiple exchange rates in March 2002

Fiscal year: