Iranian Economic Reform Plan
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The economy of Iran is a
mixed economy A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economi ...
with a large state-owned sector and is the largest in the
Middle East The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabian Peninsula, Arabia (including the Arabian Peninsula and Bahrain), Anatolia, Asia Minor (Asian part of Turkey except Hatay Pro ...
in terms of nominal GDP. It is the world's 21st largest by
purchasing power parity Purchasing power parity (PPP) is the measurement of prices in different countries that uses the prices of specific goods to compare the absolute purchasing power of the countries' currency, currencies. PPP is effectively the ratio of the price of ...
(PPP). Some 60% of
Iran Iran, officially the Islamic Republic of Iran, and also called Persia, is a country located in Western Asia. It is bordered by Iraq and Turkey to the west, by Azerbaijan and Armenia to the northwest, by the Caspian Sea and Turkmeni ...
's economy is centrally planned."A survey of Iran: Stunted and distorted". ''The Economist'' (2003) It is dominated by oil and gas production, although over 40 industries are directly involved in the
Tehran Stock Exchange The Tehran Stock Exchange (TSE) ( fa, بورس اوراق بهادار تهران, romanized: ''Burs-e Owraq-e Bahadar-e Tehran'') is Iran's largest stock exchange, which first opened in 1967. The TSE is based in Tehran. , 339 companies with a com ...
. The stock exchange has been one of the best performing exchanges in the world over the past decade.Matthew Lynn: Are you brave enough to invest in Iran?
''Wall Street Journal (Market Watch)'', March 26, 2014. Retrieved March 28, 2014.
With 10% of the world's proven oil reserves and 15% of its
gas reserves Oil and gas reserves denote ''discovered'' quantities of crude oil and natural gas (oil or gas fields) that can be profitably produced/recovered from an approved development. Oil and gas reserves tied to approved operational plans filed on th ...
, Iran is considered an "
energy superpower An energy superpower is a country that supplies large amounts of energy resources (crude oil, natural gas, coal, etc.) to a significant number of other countries, and therefore has the potential to influence world markets to gain a political or ec ...
". A unique feature of Iran's economy is the presence of large religious foundations called bonyads, whose combined budgets represent more than 30 percent of central government spending.Bonyad-e Mostazafan va Janbazan Oppressed and Disabled Veterans Foundation (MJF)
Globalsecurity.org. Retrieved February 6, 2011.
Price controls and subsidies, particularly on food and
energy In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...
, are heavily prominent in the economy.
Contraband Contraband (from Medieval French ''contrebande'' "smuggling") refers to any item that, relating to its nature, is illegal to be possessed or sold. It is used for goods that by their nature are considered too dangerous or offensive in the eyes o ...
, administrative controls, widespread corruption, and other restrictive factors undermine private sector-led growth. The government's 20-year vision (as of 2020), involves market-based reforms reflected in the government's, with a five year development plan ( FY 2016 to FY 2021) focusing on "a resilient economy" and " progress in science and technology". Most of the country's exports are
oil and gas A fossil fuel is a hydrocarbon-containing material formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and burned as a fuel. The main fossil fuels are coal, oil, and natural gas. Fossil fuels ...
, accounting for a majority of
government revenue Government revenue or national revenue is money received by a government from taxes and non-tax sources to enable it to undertake public expenditure. Government revenue as well as government spending are components of the government budget and ...
in 2010. However in March 2022, the Iranian parliament under new president
Ebrahim Raisi Sayyid Ebrahim Raisolsadati ( fa, سید ابراهیم رئیس‌الساداتی; born 14 December 1960), commonly known as Ebrahim Raisi ( fa, ابراهیم رئیسی ), is an Iranian principlist politician, Muslim jurist, and the eight ...
decided to eliminate a major subsidy for importing food, medicines and animal feed, valued at $15 billion in FY2021. Also in March 2022, 20 billion tons of basic goods exports from Russia including vegetable oil, wheat, barley and corn were agreed. Iran's educated population, high human development, constrained economy and insufficient foreign and domestic investment prompted an increasing number of Iranians to seek overseas employment, resulting in a significant " brain drain". However, in 2015, Iran and the
P5+1 P5 may refer to: In science and technology * 311P/PANSTARRS, also known as P/2013 P5 (PANSTARRS), an asteroid discovered by the Pan-STARRS telescope on 27 August 2013 * P5 Truss Segment, an element of the International Space Station * Period ...
reached a deal on the nuclear program which removed most
international sanctions International sanctions are political and economic decisions that are part of diplomatic efforts by countries, multilateral or regional organizations against states or organizations either to protect national security interests, or to protect in ...
. Consequently, for a short period, the tourism industry was significantly improved and the inflation of the country was decreased though US withdrawal from the JCPOA in 2018 hindered the growth of the economy again and increased inflation. GDP contracted in 2018 and 2019, but a modest rebound was expected in 2020. Challenges include a
COVID-19 outbreak The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identified ...
starting in February 2020 and
US sanctions The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
reimposed in mid-2018, increased unemployment due to the sanctions, inflation, a "chronically weak and undercapitalised"
banking system A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Becaus ...
, and an "anemic" private sector. Iran's currency (
Iranian rial The rial ( fa, ریال ایران, riyâl-è Irân; sign: ﷼; abbreviation: Rl (singular) and Rls (plural) or IR in Latin; ISO code: IRR) is the official currency of Iran. There is no official symbol for the currency but the Iranian standar ...
) has fallen, and Iran has a relatively low rating in "
Economic Freedom Economic freedom, or economic liberty, is the ability of people of a society to take economic actions. This is a term used in economic and policy debates as well as in the philosophy of economics. One approach to economic freedom comes from the l ...
", and "
ease of doing business The ease of doing business index was an index created jointly by Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group. The academic research for the report was done jointly with professors Edward Gl ...
".


History

In 546 BC,
Croesus Croesus ( ; Lydian: ; Phrygian: ; grc, Κροισος, Kroisos; Latin: ; reigned: c. 585 – c. 546 BC) was the king of Lydia, who reigned from 585 BC until his defeat by the Persian king Cyrus the Great in 547 or 546 BC. Croesus was ...
of
Lydia Lydia (Lydian language, Lydian: ‎𐤮𐤱𐤠𐤭𐤣𐤠, ''Śfarda''; Aramaic: ''Lydia''; el, Λυδία, ''Lȳdíā''; tr, Lidya) was an Iron Age Monarchy, kingdom of western Asia Minor located generally east of ancient Ionia in the mod ...
was defeated and captured by the
Persia Iran, officially the Islamic Republic of Iran, and also called Persia, is a country located in Western Asia. It is bordered by Iraq and Turkey to the west, by Azerbaijan and Armenia to the northwest, by the Caspian Sea and Turkmeni ...
ns, who then adopted
gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile met ...
as the main metal for their coins. There are accounts in the biblical
Book of Esther The Book of Esther ( he, מְגִלַּת אֶסְתֵּר, Megillat Esther), also known in Hebrew language, Hebrew as "the Scroll" ("the wikt:מגילה, Megillah"), is a book in the third section (, "Writings") of the Judaism, Jewish ''Tanak ...
of dispatches being sent from Susa to provinces as far out as India and the
Kingdom of Kush The Kingdom of Kush (; Egyptian language, Egyptian: 𓎡𓄿𓈙𓈉 ''kꜣš'', Akkadian language, Assyrian: ''Kûsi'', in LXX grc, Κυς and Κυσι ; cop, ''Ecōš''; he, כּוּשׁ ''Kūš'') was an ancient kingdom in Nubia, ce ...
during the reign of
Xerxes the Great Xerxes I ( peo, 𐎧𐏁𐎹𐎠𐎼𐏁𐎠 ; grc-gre, Ξέρξης ; – August 465 BC), commonly known as Xerxes the Great, was the fourth King of Kings of the Achaemenid Empire, ruling from 486 to 465 BC. He was the son and successor of D ...
(485–465 BC). By the time of
Herodotus Herodotus ( ; grc, , }; BC) was an ancient Greek historian and geographer from the Greek city of Halicarnassus, part of the Persian Empire (now Bodrum, Turkey) and a later citizen of Thurii in modern Calabria ( Italy). He is known f ...
(c. 475 BC), the
Royal Road The Royal Road was an ancient highway reorganized and rebuilt by the Persian king Darius the Great (Darius I) of the first (Achaemenid) Persian Empire in the 5th century BC. Darius built the road to facilitate rapid communication on the western ...
of the
Persian Empire The Achaemenid Empire or Achaemenian Empire (; peo, wikt:𐎧𐏁𐏂𐎶, 𐎧𐏁𐏂, , ), also called the First Persian Empire, was an History of Iran#Classical antiquity, ancient Iranian empire founded by Cyrus the Great in 550 BC. Bas ...
ran some 2,857 km from the city of
Susa Susa ( ; Middle elx, 𒀸𒋗𒊺𒂗, translit=Šušen; Middle and Neo- elx, 𒋢𒋢𒌦, translit=Šušun; Neo-Elamite and Achaemenid elx, 𒀸𒋗𒐼𒀭, translit=Šušán; Achaemenid elx, 𒀸𒋗𒐼, translit=Šušá; fa, شوش ...
on the Karun (250 km east of the Tigris) to the port of Smyrna (modern
İzmir İzmir ( , ; ), also spelled Izmir, is a metropolitan city in the western extremity of Anatolia, capital of the province of the same name. It is the third most populous city in Turkey, after Istanbul and Ankara and the second largest urban agglo ...
in
Turkey Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...
) on the
Aegean Sea The Aegean Sea ; tr, Ege Denizi (Greek language, Greek: Αιγαίο Πέλαγος: "Egéo Pélagos", Turkish language, Turkish: "Ege Denizi" or "Adalar Denizi") is an elongated embayment of the Mediterranean Sea between Europe and Asia. It ...
. Modern
agriculture in Iran Roughly one-third of Iran's total surface area is suited for farmland, but because of poor soil and lack of adequate water distribution in many areas, most of it is not under cultivation. Only 12% of the total land area is under cultivation (arabl ...
dates back to the 1850s when
Amir Kabir Mirza Taghi Khan-e Farahani ( fa, میرزا تقی‌خان فراهانی), better known as Amir Kabir (Persian: ‎, 9 January 1807 – 10 January 1852), also known by the title of ''Amir-e Nezam'' or ''Amir Nezam'' (), was chief minister t ...
undertook a number of changes to the traditional agricultural system. Such changes included importing modified seeds and signing collaboration contracts with other countries. Polyakov's ''Bank Esteqrazi'' was bought in 1898 by the Tzarist government of Russia, and later passed into the hands of the Iranian government by a contract in 1920. The bank continued its activities under the name of ''Bank Iran'' until 1933 when incorporating the newly founded Keshavarzi Bank. The
Imperial Bank of Persia The Imperial Bank of Persia ( fa, بانک شاهنشاهی ایران‎, Bank-e Šâhanšâhi-ye Irân) was a British bank that operated as the state bank and bank of issue in Iran (formerly known as Persia until 1935) between 1889 and 1929. It ...
was established in 1885, with offices in all major cities of Persia.
Reza Shah Pahlavi , , spouse = Maryam Savadkoohi Tadj ol-Molouk Ayromlu (queen consort)Turan AmirsoleimaniEsmat Dowlatshahi , issue = Princess Hamdamsaltaneh Princess ShamsMohammad Reza Shah Princess Ashraf Prince Ali Reza Prince Gholam Reza Prin ...
(r. 1925–41) improved the country's overall infrastructure, implemented educational reform, campaigned against foreign influence, reformed the legal system, and introduced modern industries. During this time, Iran experienced a period of social change, economic development, and relative political stability. Reza Shah Pahlavi, who abdicated in 1941, was succeeded by his son,
Mohammad Reza Shah Pahlavi Mohammad Reza Pahlavi ( fa, محمدرضا پهلوی, ; 26 October 1919 – 27 July 1980), also known as Mohammad Reza Shah (), was the last ''Shah'' (King) of the Imperial State of Iran from 16 September 1941 until his overthrow in the Irani ...
(r. 1941–79). No fundamental change occurred in the economy of Iran during World War II (1939–45) and the years immediately following. However, between 1954 and 1960 a rapid increase in oil revenues and sustained foreign aid led to greater investment and fast-paced economic growth, primarily in the government sector. Subsequently, inflation increased, the value of the national currency (the rial) depreciated, and a foreign-trade deficit developed. Economic policies implemented to combat these problems led to declines in the rates of nominal economic growth and per capita income by 1961. Prior to 1979, Iran developed rapidly. Traditionally agricultural, by the 1970s, the country had undergone significant industrialization and modernization. The pace slowed by 1978 as
capital flight Capital flight, in economics, occurs when assets or money rapidly flow out of a country, due to an event of economic consequence or as the result of a political event such as regime change or economic globalization. Such events could be an increas ...
reached $30 to $40 billion 1980-US dollars just before the
revolution In political science, a revolution (Latin: ''revolutio'', "a turn around") is a fundamental and relatively sudden change in political power and political organization which occurs when the population revolts against the government, typically due ...
.Shirin Hakimzadeh. Iran: A Vast Diaspora Abroad and Millions of Refugees at Home
Migration information source (2006). Retrieved July 18, 2009.
Following the nationalizations in 1979 and the outbreak of the
Iran–Iraq War The Iran–Iraq War was an armed conflict between Iran and Iraq that lasted from September 1980 to August 1988. It began with the Iraqi invasion of Iran and lasted for almost eight years, until the acceptance of United Nations Security Council ...
, over 80% of the economy came under government control. 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. After hostilities ceased in 1988, the government tried to develop the country's
communication Communication (from la, communicare, meaning "to share" or "to be in relation with") is usually defined as the transmission of information. The term may also refer to the message communicated through such transmissions or the field of inquir ...
,
transportation Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, ...
, manufacturing,
health care Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
,
education Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty. Va ...
and energy sectors (including its prospective nuclear power facilities), and began integrating its communication and transportation systems with those of neighboring states.
The government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
's long-term objectives since the revolution were stated as
economic independence Autarky is the characteristic of self-sufficiency, usually applied to societies, communities, states, and their economic systems. Autarky as an ideal or method has been embraced by a wide range of political ideologies and movements, especiall ...
,
full employment Full employment is a situation in which there is no cyclical or unemployment#Cyclical unemployment, deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely Structu ...
, and a comfortable standard of living but Iran's population more than doubled between 1980 and 2000 and its median age declined. Although many Iranians are farmers, agricultural production has consistently fallen since the 1960s. By the late 1990s, Iran imported much of its food. At that time, economic hardship in the countryside resulted in many people moving to cities. File:Provinces of Iran by contribution to national GDP.svg,
Provinces of Iran Iran is subdivided into thirty-one provinces ( fa, استان ''ostân''), each governed from a local centre, usually the largest local city, which is called the capital (Persian: , '' markaz'') of that province. The provincial authority is h ...
by contribution to national GDP (2014) File:Socio-eco expenditures IRAN.jpg, Socioeconomic expenditures (2004) File:GDP_per_capita_development_in_Iran.svg, Historical GDP per capita development in Iran (1820–2018) File:Irecosector.gif,
Economic sectors One classical breakdown of economic activity distinguishes three sectors: * Primary: involves the retrieval and production of raw-material commodities, such as corn, coal, wood or iron. Miners, farmers and fishermen are all workers in the ...
(2002) File:Inflation Iran CPI.jpg,
Inflation rate In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
(1980–2010) File:Iran market liquidity.png,
Market liquidity In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the ...
(2012) File:IRAN CPI broad money FXreserves.jpg,
CPI A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. Overview A CPI is a statistic ...
,
broad money In economics, broad money is a measure of the amount of money, or money supply, in a national economy including both highly liquid "narrow money" and less liquid forms. The European Central Bank, the OECD and the Bank of England all have their own ...
and
foreign exchange reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...
(2000–2011) File:USD-IRR exchange rate.JPG,
US dollar The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
/
Iranian rial The rial ( fa, ریال ایران, riyâl-è Irân; sign: ﷼; abbreviation: Rl (singular) and Rls (plural) or IR in Latin; ISO code: IRR) is the official currency of Iran. There is no official symbol for the currency but the Iranian standar ...
exchange rate (2003–2014 est.) File:Debt service-Iran.png, Debt service (1980–2000) File:IRANbalanceofpayment.jpg,
Balance of payment In international economics, the balance of payments (also known as balance of international payments and abbreviated BOP or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., a ...
(2003–2007) File:TEPIXvsDJIA.png, TEPIX vs
DJIA The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (), is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexe ...
and oil prices (2000–2009) File:Oil Production and Consumption.gif, Oil production and consumption (1977–2010) File:IRAN oil&gas production.jpg, Oil and gas production (1970–2030 est.)


Macroeconomic trends

The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2022–2027). Inflation below 10% is in green. Iran's national science budget in 2005 was about $900 million, roughly equivalent to the 1990 figure. By early 2000, Iran allocated around 0.4% of its GDP to
research and development Research and development (R&D or R+D), known in Europe as research and technological development (RTD), is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existi ...
, ranking the country behind the world average of 1.4%.Reza Malekzadeh, Azarakhsh Mokri, Pejman Azarmina
"Medical Science and Research in Iran"
. Academy of Medical Sciences of Iran. Retrieved December 4, 2008.
In 2009 the ratio of research to GDP was 0.87% against the government's medium-term target of 2.5%.– The foreign trade regime of the Islamic Republic of Iran
Ministry of Commerce (Iran) The Ministry of Commerce of Iran was the main organ of the Government in charge of the regulation and implementation of policies applicable to domestic and foreign trade. This includes: *implementing commercial strategies and regulations, *promot ...
(2009). Retrieved April 8, 2010.
Iran ranked first in scientific growth in the world in 2011 and 17th in science production in 2012. Iran has a broad and diversified industrial base. According to ''
The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Econo ...
'', Iran ranked 39th in a list of industrialized nations, producing $23 billion of industrial products in 2008. Between 2008 and 2009 Iran moved to 28th from 69th place in annual industrial production growth because of its relative isolation from the 2008 international financial crisis. In the early 21st century, the service sector was the country's largest, followed by industry (mining and manufacturing) and agriculture. In 2008 GDP was estimated at $382.3 billion ($842 billion PPP), or $5,470 per capita ($12,800 PPP). In 2010, the nominal GDP was projected to double in the next five years. However, real GDP growth was expected to average 2.2% a year in 2012–16, insufficient to reduce the unemployment rate.Iran at a glance
Economist Intelligence Unit The Economist Intelligence Unit (EIU) is the research and analysis division of the Economist Group, providing forecasting and advisory services through research and analysis, such as monthly country reports, five-year country economic forecasts, ...
(subscription required), December 12, 2011. Retrieved January 8, 2012.
Furthermore,
international sanctions International sanctions are political and economic decisions that are part of diplomatic efforts by countries, multilateral or regional organizations against states or organizations either to protect national security interests, or to protect in ...
have damaged the economy by reducing
oil exports This is a list of oil-producing countries by oil exports based on The World Factbook and other Sources. Many countries also import oil, and some import more oil than they export. Countries by rank Oil export revenues Academic contributi ...
by half before recovering in 2016. The
Iranian rial The rial ( fa, ریال ایران, riyâl-è Irân; sign: ﷼; abbreviation: Rl (singular) and Rls (plural) or IR in Latin; ISO code: IRR) is the official currency of Iran. There is no official symbol for the currency but the Iranian standar ...
lost more than half of its value in 2012, directing Iran at an
import substitution industrialization Import substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production.''A Comprehensive Dictionary of Economics'' p.88, ed. Nelson Brian 2009. It is based on the premise that ...
and a resistive economy.Ali Akbar Dareini: Iran Leader Unveils 'Economy of Resistance'.
Associated Press, February 19, 2014. Retrieved February 19, 2014.
According to the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
, Iran is a "
transition economy A transition economy or transitional economy is an economy which is changing from a planned economy, centrally planned economy to a market economy. Transition economies undergo a set of structural transformations intended to develop market-base ...
", i.e., changing from a planned to a market economy. The
United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
classifies Iran's economy as semi-developed. In 2014, Iran ranked 83rd in the
World Economic Forum The World Economic Forum (WEF) is an international non-governmental and lobbying organisation based in Cologny, canton of Geneva, Switzerland. It was founded on 24 January 1971 by German engineer and economist Klaus Schwab. The foundation, ...
's analysis of the global competitiveness of 144 countries.Iran ranks 69th out of 139 in global competitiveness
. ''
Global Competitiveness Report The ''Global Competitiveness Report'' (GCR) is a yearly report published by the World Economic Forum. Since 2004, the ''Global Competitiveness Report'' ranks countries based on the Global Competitiveness Index, developed by Xavier Sala-i-Martin an ...
'',
World Economic Forum The World Economic Forum (WEF) is an international non-governmental and lobbying organisation based in Cologny, canton of Geneva, Switzerland. It was founded on 24 January 1971 by German engineer and economist Klaus Schwab. The foundation, ...
(2010). Retrieved September 18, 2010.
Political, policy and currency stability are regarded as the most problematic factors in doing business in Iran. Difficulty in accessing financing is also a major concern, especially for
small and medium enterprises Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank ...
. Most of Iran's financial resources are directed at trading,
smuggling Smuggling is the illegal transportation of objects, substances, information or people, such as out of a house or buildings, into a prison, or across an international border, in violation of applicable laws or other regulations. There are various ...
and speculation instead of production and manufacturing. According to
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
, Iran has the potential to become one of the world's largest economies in the 21st century."The N-11: More Than an Acronym"
.
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
, March 28, 2007. Retrieved February 6, 2011.
Iranian President
Hassan Rouhani Hassan Rouhani ( fa, حسن روحانی, Standard Persian pronunciation: ; born Hassan Fereydoun ( fa, حسن فریدون, links=no); 12 November 1948) is an Iranian politician who served as the seventh president of Iran from 2013 to 2021. ...
stated, in 2014, that the country has the potential to become one of the ten largest economies within the next 30 years. 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. This is partly due to corrupt interests inside the government and mismanagement.


Reform plan

Expansion of
public healthcare Publicly funded healthcare is a form of health care financing designed to meet the cost of all or most healthcare needs from a publicly managed fund. Usually this is under some form of democratic accountability, the right of access to which are ...
and
international relations International relations (IR), sometimes referred to as international studies and international affairs, is the scientific study of interactions between sovereign states. In a broader sense, it concerns all activities between states—such as ...
are the other main objectives of the fifth plan, an ambitious series of measures that include subsidy reform, banking recapitalization,
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...
,
taxation A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal person, legal entity) by a governmental organization in order to fund government spending and various public expenditures (regiona ...
,
customs Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country. Traditionally, customs ...
,
construction Construction is a general term meaning the art and science to form objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Press 2009 and com ...
, employment, nationwide goods and services distribution, social justice and productivity. The intent is to make the country self-sufficient by 2015 and replace the payment of $100 billion in subsidies annually with targeted
social assistance Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
.''Iran Investment Monthly''
. Turquoise Partners (January 2011). Retrieved January 31, 2011.
These reforms target the country's major sources of inefficiency and price distortion and are likely to lead to major restructuring of almost all economic sectors. As such, by removing energy subsidies, Iran intends to make its industries more efficient and competitive. By 2016, one third of Iran's economic growth is expected to originate from productivity improvement. Energy subsidies left the country one of the world's least energy-efficient, with
energy intensity Energy intensity is a measure of the energy inefficiency of an economy. It is calculated as units of energy per unit of GDP. * High energy intensities indicate a high price or cost of converting energy into GDP. * Low energy intensity indicate ...
three times the global average and 2.5 times higher than the Middle Eastern average.Reza Taghizadeh (June 9, 2010)
Sanctions And Iran's Achilles Heel
''Radio Free Europe''. Retrieved October 13, 2010.
Notwithstanding its own issues, the banking sector is seen as a potential hedge against the removal of subsidies, as the plan is not expected to directly impact banks.


National planning

Iran's budget is established by the
Management and Planning Organization of Iran Management and Planning Organization of Iran (MPO) is an organization of the Government of Iran. It was first established after the decision of President Mahmoud Ahmadinejad for terminating the Plan and Budget Organization (PBO) in 2007. In July ...
and proposed by
the government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
to the parliament before the year's end. Following approval of the budget by
Majlis ( ar, المجلس, pl. ') is an Arabic term meaning "sitting room", used to describe various types of special gatherings among common interest groups of administrative, social or religious nature in countries with linguistic or cultural conne ...
, the
central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
presents a detailed monetary and credit policy to the Money and Credit Council (MCC) for approval. Thereafter, major elements of these policies are incorporated into the five-year economic development plan. The plan is part of "Vision 2025", a strategy for long-term sustainable growth. ;Sixth development plan (2016–2021) The sixth five-year development plan for the 2016–2021 period places emphasis on "guidelines" rather than "hard targets". It defines only three priorities: * the development of a resilient economy; * progress in science and technology; * and the promotion of cultural excellence.


Fiscal and monetary policy

Since the 1979 revolution,
government spending Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual o ...
has averaged 59% on social policies, 17% on economic matters, 15% on
national defense National security, or national defence, is the security and defence of a sovereign state, including its citizens, economy, and institutions, which is regarded as a duty of government. Originally conceived as protection against military attac ...
, and 13% on general affairs. Payments averaged 39% on
education Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty. Va ...
,
health Health, according to the World Health Organization, is "a state of complete physical, mental and social well-being and not merely the absence of disease and infirmity".World Health Organization. (2006)''Constitution of the World Health Organiza ...
and
social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
, 20% on other social programs, 3% on
agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to ...
, 16% on
water Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as a ...
, power and gas, 5% on manufacturing and mining, 12% on roads and transportation and 5% on other economic affairs. Iran's
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
reached 27.7% of GDP in 2009. Between 2002 and 2006, inflation fluctuated around 14%. In 2008, around 55% of government revenue came from oil and natural gas revenue, with 31% from taxes and fees."Crude price pegged at dlrs 39.6 a barrel under next year's budget"
''
IRNA The Islamic Republic News Agency ( fa, خبرگزاری جمهوری اسلامی, ''Xebergâzari-ye Jimhuri-ye Eslâmi-ye''), or IRNA, is the official news agency of the Islamic Republic of Iran. Founded on 13 November 1934 as Pars News Agency ...
'', January 27, 2008. Retrieved December 5, 2008.
There are virtually millions of people who do not pay taxes in Iran and hence operate outside the formal economy. The budget for year 2012 was $462 billion, 9% less than 2011.Iran's parliament approves $462 billion budget
.
Associated Press The Associated Press (AP) is an American non-profit news agency headquartered in New York City. Founded in 1846, it operates as a cooperative, unincorporated association. It produces news reports that are distributed to its members, U.S. newspa ...
. Retrieved May 19, 2012.
The budget is based on an
oil price The price of oil, or the oil price, generally refers to the spot price of a barrel () of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Ref ...
of $85 per barrel. The value of the US dollar is estimated at IRR 12,260 for the same period. According to the head of the Department of Statistics of Iran, if the rules of budgeting were observed the government could save at least 30 to 35% on its expenses. The central bank's
interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
is 21%, and the
inflation rate In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
has climbed to 22% in 2012, 10% higher than in 2011. There is little alignment between
fiscal Fiscal usually refers to government finance. In this context, it may refer to: Economics * Fiscal policy, use of government expenditure to influence economic development * Fiscal policy debate * Fiscal adjustment, a reduction in the government ...
and
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
. According to the
Central Bank of Iran The Central Bank of Iran (CBI), also known as ''Bank Markazi'', officially the Central Bank of the Islamic Republic of Iran ( fa, بانک مرکزی جمهوری اسلامی ايران, Bank Markazi-ye Jomhuri-ye Eslāmi-ye Irān; SWIFT Code: B ...
, the gap between the rich and the poor narrowed because of monthly subsidies but the trend could reverse if high inflation persists.Najmeh Bozorgmehr: Subsidy dispute adds to Iran's woes
''Financial Times'', April 25, 2012 (subscription required). Retrieved April 25, 2012.
Iran had an estimated $110 billion in
foreign reserves Foreign exchange reserves (also called forex reserves or FX reserves) are cash and other reserve assets such as gold held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence ...
in 2011Minister: Iran Facing No Problem in Currency Reserves, Revenues
. Fars News Agency, April 18, 2012. Retrieved May 2, 2012.
and balances its external payments by pricing oil at approximately $75 per barrel. As of 2013, only $30 to $50 billion of those reserves are accessible because of current sanctions.
Iranian media The mass media in Iran are privately and publicly owned but is Censorship in Iran, subject to censorship. As of 2016, Iran had Iranian newspapers, 178 newspapers, List of Iranian magazines, 83 magazines, 15,000 information sites and Iranian blogs, ...
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 Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile met ...
. As a consequence, the
Iranian rial The rial ( fa, ریال ایران, riyâl-è Irân; sign: ﷼; abbreviation: Rl (singular) and Rls (plural) or IR in Latin; ISO code: IRR) is the official currency of Iran. There is no official symbol for the currency but the Iranian standar ...
lost more than 40% of its value between December 2011 and April 2012. Iran's external and fiscal accounts reflect falling oil prices in FY 2012, but remain in surplus. 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 The National Development Fund of Iran (NDFI) ( fa, صندوق توسعه ملی) is Iran's sovereign wealth fund. It was founded in 2011 to supplement the Oil Stabilization Fund. NDFI is independent of the government's budget. Based on Article ...
) will register a surplus of 0.3% of GDP. In 2013 the
external debt A country's gross external debt (or foreign debt) is the liabilities that are owed to nonresidents by residents. The debtors can be governments, corporations or citizens. External debt may be denominated in domestic or foreign currency. It incl ...
s stood at $7.2 billion down from $17.3 billion in 2012. Overall
fiscal deficit The government budget balance, also alternatively referred to as general government balance, public budget balance, or public fiscal balance, is the overall difference between government revenues and spending. A positive balance is called a ''g ...
is expected to deteriorate to 2.7% of GDP in FY 2016 from 1.7% in 2015.Iran: Concluding Statement of an IMF Staff Visit
IMF, October 3, 2016. Retrieved October 10, 2016.
Money in circulation reached $700 billion in March 2020 (based on the 2017 pre-devaluation exchange rate), thus furthering the decline of the
Iranian rial The rial ( fa, ریال ایران, riyâl-è Irân; sign: ﷼; abbreviation: Rl (singular) and Rls (plural) or IR in Latin; ISO code: IRR) is the official currency of Iran. There is no official symbol for the currency but the Iranian standar ...
and rise in inflation.


Challenges

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. Challenges to the economy include the
COVID-19 Coronavirus disease 2019 (COVID-19) is a contagious disease caused by a virus, the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The first known case was COVID-19 pandemic in Hubei, identified in Wuhan, China, in December ...
outbreak starting in February 2020, which on top of
US sanctions The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
reimposed in mid-2018 and other factors, led a fall in oil production and are projected to lead to a slow recovery in oil exports. Labor-force participation has risen but unemployment is above 10% as of 2020 and projected to rise in 2021 and 2022. Inflation reached 41.1% in 2019, and is expected to continue "in the coming years" according to the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
, but decline into the 34-33% range. In July 2022, the average inflation rate rose 40.5% while the inflation rate for food and beverages alone rose 87%. Iran's banking system is "chronically weak and undercapitalised" according to
Nordea Bank Abp Nordea Bank Abp, commonly referred to as Nordea, is a European financial services group operating in northern Europe and based in Helsinki, Finland. The name is a blend of the words "Nordic" and "idea". The bank is the result of the successive m ...
, holding billions of dollars of non-performing loans, and the private sector remains "anemic". The unofficial
Iranian rial The rial ( fa, ریال ایران, riyâl-è Irân; sign: ﷼; abbreviation: Rl (singular) and Rls (plural) or IR in Latin; ISO code: IRR) is the official currency of Iran. There is no official symbol for the currency but the Iranian standar ...
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. Iran's economy has a relatively low rating in the Heritage Foundation's "
Index of Economic Freedom The ''Index of Economic Freedom'' is an annual index and ranking created in 1995 by The Heritage Foundation and ''The Wall Street Journal'' to measure the degree of economic freedom in the world's nations. The creators of the index claim to tak ...
" (164 out of 180); and ease of doing business ranking (127 among 190) according to the World Bank. Critics have complained that
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
has led not to state owned businesses being taken over by "skilled businesspeople" but by the powerful
Islamic Revolutionary Guard Corps The Islamic Revolutionary Guard Corps (IRGC; fa, سپاه پاسداران انقلاب اسلامی, Sepāh-e Pāsdārān-e Enghelāb-e Eslāmi, lit=Army of Guardians of the Islamic Revolution also Sepāh or Pasdaran for short) is a branch o ...
"and its associates". In 2020, an Iranian businessperson complained to a foreign journalist (
Dexter Filkins Dexter Price Filkins (born May 24, 1961) is an American journalist known primarily for his coverage of the wars in Iraq and Afghanistan for ''The New York Times''. He was a finalist for a Pulitzer Prize in 2002 for his dispatches from Afghanista ...
) 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? I can't plan for tomorrow morning." According to the
NIOC The National Iranian Oil Company (NIOC; fa, شرکت ملّی نفت ایران, Sherkat-e Melli-ye Naft-e Īrān) is a government-owned national oil and natural gas producer and distributor under the direction of the Ministry of Petroleum of Ir ...
, daily consumption of gasoline in Iran has surpassed 85 million liters, i.e., 10 times more than Turkey with almost the same population.


Ownership

Following the hostilities with Iraq, the Government declared its intention to privatize most industries and to liberalize and decentralize the economy. Sale of state-owned companies proceeded slowly, mainly due to opposition by a nationalist majority in the parliament. In 2006, most industries, some 70% of the economy, remained state-owned. The majority of heavy industries including steel, petrochemicals, copper, automobiles, and machine tools remained in the public sector, with most light industry privately owned. Article 44 of the
Iranian Constitution The Constitution of the Islamic Republic of Iran ( fa, قانون اساسی جمهوری اسلامی ایران, ''Qanun-e Asasi-ye Jomhuri-ye Eslâmi-ye Iran'') was adopted by referendum on 2 and 3 December 1979, and went into force replac ...
declares that the country's economy should consist of state, cooperative, and private based sectors. The state sector includes all large-scale industries, foreign trade, major minerals, banking, insurance, power generation, dams and large-scale irrigation networks, radio and television, post, telegraph and telephone services, aviation, shipping, roads, railroads and the like. These are publicly owned and administered by the State. Cooperative companies and enterprises concerned with production and distribution in urban and rural areas form the basis of the cooperative sector and operated in accordance with
Shariah law Sharia (; ar, شريعة, sharīʿa ) is a body of religious law that forms a part of the Islamic tradition. It is derived from the religious precepts of Islam and is based on the sacred scriptures of Islam, particularly the Quran and the H ...
. As of 2012, 5,923 consumer cooperatives, employed 128,396.6,000 Cooperatives Nationwide
''Iran Daily'', July 12, 2012. Retrieved July 14, 2012.
Consumer cooperatives have over six million members. Private sector operate in construction, agriculture, animal husbandry, industry, trade, and services that supplement the economic activities of the state and cooperative sectors. Since Article 44 has never been strictly enforced, the private sector has played a much larger role than that outlined in the constitution. In recent years, the role of this sector has increased. A 2004 constitutional amendment allows 80% of state assets to be privatized. Forty percent of such sales are to be conducted through the " Justice Shares" scheme and the rest through the
Tehran Stock Exchange The Tehran Stock Exchange (TSE) ( fa, بورس اوراق بهادار تهران, romanized: ''Burs-e Owraq-e Bahadar-e Tehran'') is Iran's largest stock exchange, which first opened in 1967. The TSE is based in Tehran. , 339 companies with a com ...
. The government would retain the remaining 20%. In 2005, government assets were estimated at around $120 billion. Some $63 billion of such assets were privatized from 2005 to 2010, reducing the government's direct share of GDP from 80% to 40%. Many companies in Iran remain uncompetitive because of mismanagement over the years, thus making privatization less attractive for potential investors. According to then-President
Mahmoud Ahmadinejad Mahmoud Ahmadinejad ( fa, محمود احمدی‌نژاد, Mahmūd Ahmadīnežād ), born Mahmoud Sabbaghian ( fa, محمود صباغیان, Mahmoud Sabbāghyān, 28 October 1956),
, 60% of Iran's wealth is controlled by just 300 people.


Islamic Revolutionary Guard Corps

The
Islamic Revolutionary Guard Corps The Islamic Revolutionary Guard Corps (IRGC; fa, سپاه پاسداران انقلاب اسلامی, Sepāh-e Pāsdārān-e Enghelāb-e Eslāmi, lit=Army of Guardians of the Islamic Revolution also Sepāh or Pasdaran for short) is a branch o ...
(IRGC) are thought to control about one third of Iran's economy through subsidiaries and trusts. Estimates by the ''
Los Angeles Times The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the Un ...
'' suggest IRGC has ties to over one hundred companies and annual revenue in excess of $12 billion, particularly in construction. The Ministry of Petroleum awarded IRGC billions of dollars in
no-bid contract Multisourcing is the concept of working with multiple suppliers who are also competitors. Large-scale buyers, such as the U.S. federal government, may want to feel assured that there is more than one supplier for an item. It has been described as t ...
s as well as major infrastructure projects. Tasked with border control, IRGC maintains a monopoly on smuggling, costing Iranian companies billions of dollars each year. Smuggling is encouraged in part by the generous subsidization of domestic goods (including
fuel A fuel is any material that can be made to react with other substances so that it releases energy as thermal energy or to be used for work. The concept was originally applied solely to those materials capable of releasing chemical energy but ...
). IRGC also runs the telecommunication company, laser eye-surgery clinics, makes cars, builds bridges and roads and develops oil and gas fields.


Religious foundations

Welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
programs for the needy are managed by more than 30 public agencies alongside semi-state organizations known as '' bonyads'', together with several private non-governmental organizations. ''Bonyads'' are a consortium of over 120 tax-exempt organizations that receive subsidies and religious donations. They answer directly to the
Supreme Leader of Iran The Supreme Leader of Iran ( fa, رهبر ایران, rahbar-e irān) is the List of heads of state of Iran, head of state of the Iran, Islamic Republic of Iran. The Supreme Leader directs the Government of the Islamic Republic of Iran, executiv ...
and control over 20% of GDP. 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.Abbas Bakhtiar
"Ahmadinejad's Achilles Heel: The Iranian Economy"
Payvand, January 25, 2007. Retrieved February 12, 2008.
''Bonyad'' companies also compete with Iran's unprotected private sector, whose firms complain of the difficulty of competing with the subsidized ''bonyads''. ''Bonyads'' are not subject to audit or Iran's accounting laws. ''
Setad The Execution of Imam Khomeini's Order (EIKO) ( fa, ستاد اجرایی فرمان امام, ''Setâd-e Ejrây-ye Farmân-e Emâm''), also known as the Executive Headquarters of Imam's Directive or simply Setad, is a parastatal organization in ...
'' is a multi-sector business organization, with holdings of 37 companies, and an estimated value of $95 billion. It is under the control of the Supreme Leader,
Ali Khamenei Sayyid Ali Hosseini Khamenei ( fa, سید علی حسینی خامنه‌ای, ; born 19 April 1939) is a Twelver Shia ''marja and the second and current Supreme Leader of Iran, in office since 1989. He was previously the third president o ...
, and created from thousands of properties confiscated from Iranians.


Labor force

After the revolution, the government established a national
education system The educational system generally refers to the structure of all institutions and the opportunities for obtaining education within a country. It includes all pre-school institutions, starting from family education, and/or early childhood education ...
that improved adult literacy rates: as of 2008 85% of the adult population was literate, well ahead of the regional average of 62%. The
Human Development Index The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, whi ...
was 0.749 in 2013, placing Iran in the "high human development" bracket. Annual economic growth of above 5% is necessary to absorb the 750,000 new labor force entrants each year.. ''Iran Daily'', June 24, 2008. Agriculture contributes just 10% to GDP and employs 16% of the labor force. As of 2017 the
industrial sector In macroeconomics, the secondary sector of the economy is an economic sector in the three-sector theory that describes the role of manufacturing. It encompasses industries that produce a finished, usable product or are involved in construction ...
, which includes mining, manufacturing, and construction, contributed 35% of GDP and employed 35% of the labor force. Mineral products, notably
petroleum Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crud ...
, account for 80% of Iran's export revenues, even though mining employs less than 1% of the labor force. In 2004 the service sector ranked as the largest contributor to GDP (48%) and employed 44% of workers.
Women A woman is an adult female human. Prior to adulthood, a female human is referred to as a girl (a female child or Adolescence, adolescent). The plural ''women'' is sometimes used in certain phrases such as "women's rights" to denote female hum ...
made up 33% of the labor force in 2005. Youth unemployment (aged 15–24) was 29.1% in 2012, resulting in significant brain drain. According to the government, some 40% of the workforce in the
public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, infra ...
are either in excess or incompetent.


Personal income and poverty

Iran is classed as a
middle income country The category of newly industrialized country (NIC), newly industrialized economy (NIE) or middle income country is a socioeconomic classification applied to several countries around the world by political scientists and economists. They represent ...
and has made significant progress in provision of health and education services in the period covered by the
Millennium Development Goals The Millennium Development Goals (MDGs) were eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millenniu ...
(MDGs). In 2010, Iran's average monthly income was about $500 (
GNI per capita This is a list of countries by gross national income per capita in 2020 at nominal values, according to the Atlas method, an indicator of income developed by the World Bank. Methodology The GNI per capita is the dollar value of a country's ...
in 2012: $13,000 by PPP).Iran's per capita income exceeds $13,000: minister
Mehr News Agency, May 8, 2012. Retrieved April 18, 2014.
Iran Data by country: Iran, Islamic Rep
. World Bank (2011). Retrieved February 5, 2011.
A minimum national wage applies to each sector of activity as defined by the Supreme Labor Council. In 2009 this was about $263 per month ($3,156 per year). The
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
reported that in 2001, approximately 20% of household consumption was spent on food, 32% on fuel, 12% on health care and 8% on education. Iranians have little debt. Seventy percent of Iranians own their homes.. ''Iran Daily'', April 9, 2007. According to the Statistical Center of Iran, median household income of Iran in the fiscal year of 2018–2019 was 434,905,000 rials (a bit above $3,300), an 18.6% rise from the previous yearlong period of 2017–2018, where median household income was about 366,700,000 rials. Adjusted for
purchasing power parity Purchasing power parity (PPP) is the measurement of prices in different countries that uses the prices of specific goods to compare the absolute purchasing power of the countries' currency, currencies. PPP is effectively the ratio of the price of ...
, Iran's 2017–2018 median income was equivalent to about $28,647 (2017 conversion factor, private consumption, LCU). As the average Iranian household size is 3.5, this puts median personal income at around $8,185. While Iran rates relatively well on income, median wealth is very low for its income level (on par with Vietnam or Djibouti), indicating a high level of spending. According to SCI, median household spending in the FY 2018 was 393,227,000 rials, or 90.5% of the median household income of 434,905,000 rials.
After the Revolution After may refer to: Literature * ''After'' (Elgar), an 1895 poem by Philip Bourke Marston set to music by Edward Elgar * ''After'' (Prose novel), a 2003 novel by Francine Prose * ''After'' (book), a 2005 book by Canadian writer Francis Chalifour ...
, the composition of the middle class in Iran did not change significantly, but its size doubled from about 15% of the population in 1979 to more than 32% in 2000. The official poverty line in
Tehran Tehran (; fa, تهران ) is the largest city in Tehran Province and the capital of Iran. With a population of around 9 million in the city and around 16 million in the larger metropolitan area of Greater Tehran, Tehran is the most popul ...
for the year ending March 20, 2008, was $9,612, while the national average poverty line was $4,932. 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.


Social security

Although Iran does not offer universal social protection, in 1996, the Iranian Center for Statistics estimated that more than 73% of the Iranian population was covered by social security. Membership of the social security system for all employees is compulsory. Social security ensures employee protection against unemployment, disease, old age and occupational accidents. In 2003, the government began to consolidate its welfare organizations to eliminate redundancy and inefficiency. In 2003 the minimum standard pension was 50% of the worker's earnings but no less than the minimum wage. Iran spent 22.5% of its 2003 national
budget A budget is a calculation play, usually but not always financial, for a defined period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including time, costs and expenses, environmenta ...
on
social welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet Basic needs, basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refe ...
programs of which more than 50% covered pension costs. Out of the 15,000 homeless in Iran in 2015, 5,000 were
women A woman is an adult female human. Prior to adulthood, a female human is referred to as a girl (a female child or Adolescence, adolescent). The plural ''women'' is sometimes used in certain phrases such as "women's rights" to denote female hum ...
. Employees between the age of 18 and 65 years are covered by the social security system with financing shared between the employee (7% of salary), the employer (20–23%) and the state, which in turn supplements the employer contribution up to 3%. Social security applies to self-employed workers, who voluntarily contribute between 12% and 18% of income depending on the protection sought.Iran's entry
U.S. Social Security Administration. Retrieved October 14, 2010.
Civil servants The civil service is a collective term for a sector of government composed mainly of career civil servants hired on professional merit rather than appointed or elected, whose institutional tenure typically survives transitions of political leaders ...
, the regular military, law enforcement agencies, and IRGC have their own pension systems.


Trade unions

Although Iranian workers have a theoretical right to form labor unions, there is no union system in the country. Ostensible worker representation is provided by the Workers' House, a state-sponsored institution that attempts to challenge some state policies.
Guild A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular area. The earliest types of guild formed as organizations of tradesmen belonging to a professional association. They sometimes ...
unions operate locally in most areas, but are limited largely to issuing credentials and licenses. The right to strike is generally not respected by the state. Since 1979 strikes have often been met by police action. A comprehensive law covers labor relations, including hiring of foreign workers. This provides a broad and inclusive definition of the individuals it covers, recognizing written, oral, temporary and indefinite employment contracts. Considered employee-friendly, the labor law makes it difficult to lay off staff. Employing personnel on consecutive six-month contracts (to avoid paying benefits) is illegal, as is dismissing staff without proof of a serious offense. Labor disputes are settled by a special labor council, which usually rules in favor of the employee.


Sectors


Agriculture and foodstuffs

Agriculture contributes 9.5% to the
gross domestic product Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...
and employs 17% of the labor force. About 9% of Iran's land is arable, with the main food-producing areas located in the
Caspian Caspian can refer to: *The Caspian Sea *The Caspian Depression, surrounding the northern part of the Caspian Sea *The Caspians, the ancient people living near the Caspian Sea *Caspian languages, collection of languages and dialects of Caspian peopl ...
region and in northwestern valleys. Some northern and western areas support rain-fed agriculture, while others require
irrigation Irrigation (also referred to as watering) is the practice of applying controlled amounts of water to land to help grow Crop, crops, Landscape plant, landscape plants, and Lawn, lawns. Irrigation has been a key aspect of agriculture for over 5,00 ...
. Primitive farming methods, overworked and under-fertilized soil, poor seed and water scarcity are the principal obstacles to increased production. About one third of total cultivated land is irrigated. Construction of multipurpose dams and reservoirs along rivers in the
Zagros The Zagros Mountains ( ar, جبال زاغروس, translit=Jibal Zaghrus; fa, کوه‌های زاگرس, Kuh hā-ye Zāgros; ku, چیاکانی زاگرۆس, translit=Çiyakani Zagros; Turkish: ''Zagros Dağları''; Luri: ''Kuh hā-ye Zāgro ...
and
Alborz The Alborz ( fa, البرز) range, also spelled as Alburz, Elburz or Elborz, is a mountain range in northern Iran that stretches from the border of Azerbaijan along the western and entire southern coast of the Caspian Sea and finally runs nort ...
mountains have increased the amount of water available for irrigation. Agricultural production is increasing as a result of modernization, mechanization, improvements to crops and livestock as well as land redistribution programs. Wheat, the most important crop, is grown mainly in the west and northwest. Rice is the major crop in the Caspian region. Other crops include barley, corn, cotton, sugar beets, tea, hemp, tobacco, fruits, potatoes, legumes (beans and lentils), vegetables, fodder plants (alfalfa and clover), almonds, walnuts and spices including
cumin Cumin ( or , or Article title
) (''Cuminum cyminum'') is a
sumac Sumac ( or ), also spelled sumach, is any of about 35 species of flowering plants in the genus ''Rhus'' and related genera in the cashew family (Anacardiaceae). Sumacs grow in subtropical and temperate regions throughout the world, including Eas ...
. Iran is the world's largest producer of
saffron Saffron () is a spice derived from the flower of ''Crocus sativus'', commonly known as the "saffron crocus". The vivid crimson stigma and styles, called threads, are collected and dried for use mainly as a seasoning and colouring agent i ...
,
pistachios The pistachio (, ''Pistacia vera''), a member of the cashew family, is a small tree originating from Central Asia and the Middle East. The tree produces seeds that are widely consumed as food. ''Pistacia vera'' is often confused with other sp ...
, honey,
berberis ''Berberis'' (), commonly known as barberry, is a large genus of deciduous and evergreen shrubs from tall, found throughout Temperateness, temperate and subtropical regions of the world (apart from Australia). Species diversity is greatest in S ...
and
berries A berry is a small, pulpy, and often edible fruit. Typically, berries are juicy, rounded, brightly colored, sweet, sour or tart, and do not have a stone or pit, although many pips or seeds may be present. Common examples are strawberries, raspb ...
and the second largest date producer.Commodities by country – Iran
. FAO Statistics (2010). Retrieved January 30, 2010.
Meat and dairy products include lamb, goat meat, beef, poultry, milk, eggs, butter, and cheese. Non-food products include wool, leather, and silk. Forestry products from the northern slopes of the
Alborz Mountains The Alborz ( fa, البرز) range, also spelled as Alburz, Elburz or Elborz, is a mountain range in northern Iran that stretches from the border of Azerbaijan along the western and entire southern coast of the Caspian Sea and finally runs nort ...
are economically important. Tree-cutting is strictly controlled by the government, which also runs a
reforestation Reforestation (occasionally, reafforestation) is the natural or intentional restocking of existing forests and woodlands (forestation) that have been depleted, usually through deforestation, but also after clearcutting. Management A debate ...
program. Rivers drain into the Caspian Sea and are fished for salmon, carp, trout, pike, and sturgeon that produce
caviar Caviar (also known as caviare; from fa, خاویار, khâvyâr, egg-bearing) is a food consisting of salt-cured roe of the family Acipenseridae. Caviar is considered a delicacy and is eaten as a garnish or a spread. Traditionally, the ter ...
, of which Iran is the largest producer. Since the 1979 revolution, commercial farming has replaced subsistence farming as the dominant mode of agricultural production. By 1997, the gross value reached $25 billion. Iran is 90% self-sufficient in essential agricultural products, although limited rice production leads to substantial imports. In 2007 Iran reached self-sufficiency in wheat production and for the first time became a net wheat exporter. By 2003, a quarter of Iran's non-oil exports were of agricultural products, including fresh and dried fruits, nuts, animal hides, processed foods, and spices. Iran exported $736 million worth of
foodstuff Food is any substance consumed by an organism for nutritional support. Food is usually of plant, animal, or fungal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals. The substance is inge ...
s in 2007 and $1 billion (~600,000 tonnes) in 2010. A total of 12,198 entities are engaged in the Iranian food industry, or 12% of all entities in the
industry sector Industry classification or industry taxonomy is a type of economic taxonomy that classifies companies, organizations and traders into industrial groupings based on similar production processes, similar products, or similar behavior in financial ...
. The sector also employs approximately 328,000 people or 16.1% of the entire industry sector's workforce.


Manufacturing

Large-scale factory manufacturing began in the 1920s. During the
Iran–Iraq War The Iran–Iraq War was an armed conflict between Iran and Iraq that lasted from September 1980 to August 1988. It began with the Iraqi invasion of Iran and lasted for almost eight years, until the acceptance of United Nations Security Council ...
, Iraq bombed many of Iran's petrochemical plants, damaging the large oil refinery at Abadan bringing production to a halt. Reconstruction began in 1988 and production resumed in 1993. In spite of the war, many small factories sprang up to produce import-substitution goods and materials needed by the military. Iran's major manufactured products are petrochemicals, steel and copper products. Other important manufactures include automobiles, home and electric appliances, telecommunications equipment, cement and industrial machinery. Iran operates the largest operational population of industrial robots in West Asia. Other products include paper, rubber products, processed foods, leather products and
pharmaceuticals A medication (also called medicament, medicine, pharmaceutical drug, medicinal drug or simply drug) is a drug used to diagnose, cure, treat, or prevent disease. Drug therapy (pharmacotherapy) is an important part of the medical field and rel ...
. In 2000,
textile mills Textile Manufacturing or Textile Engineering is a major industry. It is largely based on the conversion of fibre into yarn, then yarn into fabric. These are then dyed or printed, fabricated into cloth which is then converted into useful goods s ...
, using domestic cotton and wool such as ''Tehran Patou'' and ''Iran Termeh'' employed around 400,000 people around Tehran,
Isfahan Isfahan ( fa, اصفهان, Esfahân ), from its Achaemenid empire, ancient designation ''Aspadana'' and, later, ''Spahan'' in Sassanian Empire, middle Persian, rendered in English as ''Ispahan'', is a major city in the Greater Isfahan Regio ...
and along the Caspian coast. A 2003 report by the
United Nations Industrial Development Organization The United Nations Industrial Development Organization (UNIDO) (French: Organisation des Nations unies pour le développement industriel; French/Spanish acronym: ONUDI) is a specialized agency of the United Nations that assists countries in e ...
regarding
small and medium-sized enterprises Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank ...
(SMEs)''Iran's Small and Medium Enterprises''
. The United Nations Industrial Development Organization (2003). Retrieved February 2, 2010.
identified the following impediments to industrial development: * Lack of monitoring institutions; * Inefficient
banking system A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Becaus ...
; * Insufficient
research & development Research and development (R&D or R+D), known in Europe as research and technological development (RTD), is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existi ...
; * Shortage of managerial skills; *
Corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
; * Inefficient taxation; * Socio-cultural apprehensions; * Absence of social learning loops; * Shortcomings in international market awareness necessary for global competition; * Cumbersome bureaucratic procedures; * Shortage of skilled labor; * Lack of
intellectual property protection Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...
; * Inadequate social capital, social responsibility and socio-cultural values. Despite these problems, Iran has progressed in various scientific and technological fields, including
petrochemical Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable sou ...
,
pharmaceutical A medication (also called medicament, medicine, pharmaceutical drug, medicinal drug or simply drug) is a drug used to diagnose, cure, treat, or prevent disease. Drug therapy (pharmacotherapy) is an important part of the medical field and re ...
,
aerospace Aerospace is a term used to collectively refer to the atmosphere and outer space. Aerospace activity is very diverse, with a multitude of commercial, industrial and military applications. Aerospace engineering consists of aeronautics and astrona ...
,
defense Defense or defence may refer to: Tactical, martial, and political acts or groups * Defense (military), forces primarily intended for warfare * Civil defense, the organizing of civilians to deal with emergencies or enemy attacks * Defense industr ...
, and
heavy industry Heavy industry is an industry that involves one or more characteristics such as large and heavy products; large and heavy equipment and facilities (such as heavy equipment, large machine tools, huge buildings and large-scale infrastructure); o ...
. Even in the face of
economic sanctions Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they may ...
, Iran is emerging as an
industrialized country A developed country (or industrialized country, high-income country, more economically developed country (MEDC), advanced country) is a sovereign state that has a high quality of life, developed economy and advanced technological infrastruct ...
.


Handicrafts

Iran has a long tradition of producing artisanal goods including
Persian carpet A Persian carpet ( fa, فرش ایرانی, translit=farš-e irâni ) or Persian rug ( fa, قالی ایرانی, translit=qâli-ye irâni ),Savory, R., ''Carpets'',(Encyclopaedia Iranica); accessed January 30, 2007. also known as Iranian ...
s,
ceramics A ceramic is any of the various hard, brittle, heat-resistant and corrosion-resistant materials made by shaping and then firing an inorganic, nonmetallic material, such as clay, at a high temperature. Common examples are earthenware, porcelain ...
, copperware, brassware, glass, leather goods, textiles and wooden artifacts. The country's carpet-weaving tradition dates from pre-Islamic times and remains an important industry contributing substantial amounts to rural incomes. An estimated 1.2 million weavers in Iran produce carpets for domestic and international export markets. More than $500 million worth of hand-woven carpets are exported each year, accounting for 30% of the 2008 world market. Around 5.2 million people work in some 250 handicraft fields and contribute 3% of GDP.


Automobile manufacturing

As of 2001, 13 public and privately owned automakers within Iran, led by Iran Khodro and
Saipa SAIPA ( fa, سایپا, ''SAIPA'') is an Iranian automaker headquartered in Tehran. The SAIPAC (an acronym for the French ''Société anonyme iranienne de production des automobiles Citroën'') was established in 1965 as with 75% Iranian ownersh ...
that accounted for 94% of domestic production. Iran Khodro's
Paykan The Paykan ( fa, پيکان meaning ''Arrow'') is the first Iranian-made car produced by Iran Khodro (formerly called "Iran National") between 1967 and 2005. The car was very popular in Iran from its introduction until its discontinuation. I ...
, replaced by the
Samand The IKCO Samand is an Iranian sedan produced by IKCO. The Samand production project began in 2001 and the first car was sold in 2001. The Samand inherits the mantle of Iran's national automobile from the Paykan, which was sold by Iran Khodro fr ...
in 2005, is the predominant brand. With 61% of the 2001 market, Khodro was the largest player, whilst Saipa contributed 33% that year. Other car manufacturers, such as the
Bahman Group Bahman Group ( fa, , ''Gruh-e Bahman'') is an Iranian car manufacturer which was originally registered under the name Iran Gulf Company on February 5, 1953. During the first seven years of its operations, the company was involved in maritime tr ...
, Kerman Motors,
Kish Khodro Kish Khodro is an Iranian car company established in 1995 and registered in Kish Island. It was owned by Mohammad Saffari (51%), Bank of Industry and Mine (40%) and Kamran Naghdi, the Managing Director of BMS Automotives Ltd from the United Kingdom ...
, Raniran, Traktorsazi, Shahab Khodro and others accounted for the remaining 6%. These automakers produce a wide range of vehicles including motorbikes, passenger cars such as Saipa's Tiba, vans, mini trucks, medium-sized trucks, heavy trucks, minibuses, large buses and other heavy automobiles used for commercial and private activities in the country. In 2009 Iran ranked fifth in car production growth after China, Taiwan, Romania and India. Iran was the world's 12th biggest automaker in 2010 and operates a fleet of 11.5 million cars. Iran produced 1,395,421 cars in 2010, including 35,901 commercial vehicles.


Defense industry

In 2007 the
International Institute for Strategic Studies The International Institute for Strategic Studies (IISS) is a British research institute or think tank in the area of international affairs. Since 1997, its headquarters have been Arundel House in London, England. The 2017 Global Go To Think T ...
estimated Iran's defense budget at $7.31 billion, equivalent to 2.6% of GDP or $102 per capita, ranking it 25th internationally. The country's
defense industry The arms industry, also known as the arms trade, is a global industry which manufactures and sells weapons and military technology. It consists of a commercial industry involved in the research and development, engineering, production, and servi ...
manufactures many types of arms and equipment. Since 1992, Iran's
Defense Industries Organization ''Sâzmân-e Sanâye'-e Defâ'-e Jomhuri-ye Eslâmi-ye Iran'' , type = State-owned company , location = , industry = Defense , predecessor = , foundation = , founder = , hq_location_city = Tehran , hq_location_country = Iran , num_lo ...
(DIO) has produced its own tanks, armored personnel carriers,
guided missiles In military terminology, a missile is a guided airborne ranged weapon capable of self-propelled flight usually by a jet engine or rocket motor. Missiles are thus also called guided missiles or guided rockets (when a previously unguided rocket i ...
, radar systems, guided missile destroyers, military vessels, submarines and fighter planes. In 2006 Iran exported weapons to 57 countries, including
NATO The North Atlantic Treaty Organization (NATO, ; french: Organisation du traité de l'Atlantique nord, ), also called the North Atlantic Alliance, is an intergovernmental military alliance between 30 member states – 28 European and two No ...
members, and exports reached $100 million. It has also developed a sophisticated mobile
air defense system Anti-aircraft warfare, counter-air or air defence forces is the battlespace response to aerial warfare, defined by NATO as "all measures designed to nullify or reduce the effectiveness of hostile air action".AAP-6 It includes surface based, ...
dubbed as
Bavar 373 Bavar-373 ( fa, باور-۳۷۳, meaning ''Belief'' and ''373'' being Abjad for ''یا رسول‌الله'' or ''O, Messenger of Allah!'') is an Iranian long-range road-mobile surface-to-air missile system unveiled in August 2016. Iran describes ...
.


Construction and real estate

Until the early 1950s construction remained in the hands of small domestic companies. Increased income from oil and gas and easy credit triggered a building boom that attracted international construction firms to the country. This growth continued until the mid-1970s when a sharp rise in inflation and a credit squeeze collapsed the boom. The construction industry had revived somewhat by the mid-1980s, although housing shortages and speculation remained serious problems, especially in large urban centers. As of January 2011, the banking sector, particularly Bank Maskan, had loaned up to 102 trillion rials ($10.2 billion) to applicants of Mehr housing scheme. 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. Annual turnover amounted to $38.4 billion in 2005 and $32.8 billion in 2011. Because of poor construction quality, many buildings need seismic reinforcement or renovation. Iran has a large dam building industry.. ''Iran Daily'', November 29, 2006.


Mines and metals

Mineral production contributed 0.6% of the country's GDP in 2011, a figure that increases to 4% when mining-related industries are included. Gating factors include poor infrastructure, legal barriers, exploration difficulties, and government control over all resources. Iran is ranked among the world's 15 major mineral-rich countries. Although the petroleum industry provides the majority of revenue, about 75% of all mining sector employees work in mines producing minerals other than oil and natural gas. These include coal, iron ore, copper, lead, zinc, chromium,
barite Baryte, barite or barytes ( or ) is a mineral consisting of barium sulfate ( Ba S O4). Baryte is generally white or colorless, and is the main source of the element barium. The ''baryte group'' consists of baryte, celestine (strontium sulfate), ...
, salt,
gypsum Gypsum is a soft sulfate mineral composed of calcium sulfate dihydrate, with the chemical formula . It is widely mined and is used as a fertilizer and as the main constituent in many forms of plaster, blackboard or sidewalk chalk, and drywall. ...
,
molybdenum Molybdenum is a chemical element with the symbol Mo and atomic number 42 which is located in period 5 and group 6. The name is from Neo-Latin ''molybdaenum'', which is based on Ancient Greek ', meaning lead, since its ores were confused with lea ...
,
strontium Strontium is the chemical element with the symbol Sr and atomic number 38. An alkaline earth metal, strontium is a soft silver-white yellowish metallic element that is highly chemically reactive. The metal forms a dark oxide layer when it is ex ...
,
silica Silicon dioxide, also known as silica, is an oxide of silicon with the chemical formula , most commonly found in nature as quartz and in various living organisms. In many parts of the world, silica is the major constituent of sand. Silica is one ...
, uranium, and gold, the latter of which is mainly a by-product of the Sar Cheshmeh copper complex operation. The mine at Sar Cheshmeh in Kerman Province is home to the world's second largest store of copper. Large iron ore deposits exist in central Iran, near Bafq,
Yazd Yazd ( fa, یزد ), formerly also known as Yezd, is the capital of Yazd Province, Iran. The city is located southeast of Isfahan. At the 2016 census, the population was 1,138,533. Since 2017, the historical city of Yazd is recognized as a Worl ...
and Kerman. The government owns 90% of all mines and related industries and is seeking foreign investment. The sector accounts for 3% of exports. In 2019, the country was the 2nd largest world producer of
gypsum Gypsum is a soft sulfate mineral composed of calcium sulfate dihydrate, with the chemical formula . It is widely mined and is used as a fertilizer and as the main constituent in many forms of plaster, blackboard or sidewalk chalk, and drywall. ...
; the 8th largest world producer of
molybdenum Molybdenum is a chemical element with the symbol Mo and atomic number 42 which is located in period 5 and group 6. The name is from Neo-Latin ''molybdaenum'', which is based on Ancient Greek ', meaning lead, since its ores were confused with lea ...
; the world's 8th largest producer of
antimony Antimony is a chemical element with the symbol Sb (from la, stibium) and atomic number 51. A lustrous gray metalloid, it is found in nature mainly as the sulfide mineral stibnite (Sb2S3). Antimony compounds have been known since ancient time ...
; the 11th largest world producer of
iron ore Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, or deep purple to rusty red. The iron is usually found in the fo ...
; the 18th largest world producer of
sulfur Sulfur (or sulphur in British English) is a chemical element with the symbol S and atomic number 16. It is abundant, multivalent and nonmetallic. Under normal conditions, sulfur atoms form cyclic octatomic molecules with a chemical formula ...
, in addition to being the 21st largest worldwide producer of
salt Salt is a mineral composed primarily of sodium chloride (NaCl), a chemical compound belonging to the larger class of salts; salt in the form of a natural crystalline mineral is known as rock salt or halite. Salt is present in vast quantitie ...
. It was the 13th largest producer in the world of
uranium Uranium is a chemical element with the symbol U and atomic number 92. It is a silvery-grey metal in the actinide series of the periodic table. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons. Uranium is weak ...
in 2018. Iran has recoverable coal reserves of nearly 1.9 billion 
short ton The short ton (symbol tn) is a measurement unit equal to . It is commonly used in the United States, where it is known simply as a ton, although the term is ambiguous, the single word being variously used for short, long, and metric ton. The vari ...
nes. By mid-2008, the country produced about 1.3 million short tonnes of coal annually and consumed about 1.5 million short tonnes, making it a net importer. The country plans to increase hard-coal production to 5 million tons in 2012 from 2 million tons in November 2008.Iran Plans to Produce 250,000 Tons of Copper in Year to March
Bloomberg, November 28, 2008. Retrieved November 28, 2008.
The main steel mills are located in Isfahan and
Khuzestan Khuzestan Province (also spelled Xuzestan; fa, استان خوزستان ''Ostān-e Xūzestān'') is one of the 31 provinces of Iran. It is in the southwest of the country, bordering Iraq and the Persian Gulf. Its capital is Ahvaz and it covers ...
. Iran became self-sufficient in steel in 2009. Aluminum and copper production are projected to hit 245,000 and 383,000 tons respectively by March 2009. Cement production reached 65 million tons in 2009, exporting to 40 countries.Iran: $30 Billion Dollar to be invested in industry
IRNA, November 15, 2008. Retrieved November 15, 2008.


Petrochemicals

Iran manufactures 60–70% of its equipment domestically, including refineries, oil tankers, drilling rigs, offshore platforms, and exploration instruments. Based on a fertilizer plant in
Shiraz Shiraz (; fa, شیراز, Širâz ) is the List of largest cities of Iran, fifth-most-populous city of Iran and the capital of Fars province, Fars Province, which has been historically known as Pars (Sasanian province), Pars () and Persis. As o ...
, the world's largest
ethylene Ethylene (IUPAC name: ethene) is a hydrocarbon which has the formula or . It is a colourless, flammable gas with a faint "sweet and musky" odour when pure. It is the simplest alkene (a hydrocarbon with carbon-carbon double bonds). Ethylene i ...
unit, in
Asalouyeh Asalouyeh ( fa, عسلويه, also Romanized as 'Asalūyeh; also known as Asalu, and sometimes prefixed by bandar, meaning port) is a city and capital of Asaluyeh County, in Bushehr Province, Iran. At the 2006 census, its population was 4,746 ...
, and the completion of other special economic zone projects, Iran's exports in petrochemicals reached $5.5 billion in 2007, $9 billion in 2008 and $7.6 billion during the first ten months of the Iranian calendar year 2010.
National Petrochemical Company The National Petrochemical Company (NPC) ( fa, شرکت ملی صنایع پتروشیمی, ''Shirkat-e Mili-ye Sânai'-ye Petrushimiy''), a subsidiary to the Iranian Petroleum Ministry, is owned by the government of the Islamic Republic of Iran. ...
's output capacity will increase to over 100 million tpa by 2015 from an estimated 50 million tpa in 2010 thus becoming the world' second largest chemical producer globally after
Dow Chemical The Dow Chemical Company, officially Dow Inc., is an American multinational chemical corporation headquartered in Midland, Michigan, United States. The company is among the three largest chemical producers in the world. Dow manufactures plastics ...
with Iran housing some of the world's largest chemical complexes. Major refineries located at
Abadan Abadan ( fa, آبادان ''Ābādān'', ) is a city and capital of Abadan County, Khuzestan Province, which is located in the southwest of Iran. It lies on Abadan Island ( long, 3–19 km or 2–12 miles wide). The island is bounded ...
(site of its first refinery), Kermanshah and Tehran failed to meet domestic demand for gasoline in 2009. Iran's refining industry requires $15 billion in investment over the period 2007–2012 to become self-sufficient and end gasoline imports. Iran has the fifth cheapest gasoline prices in the world leading to fuel smuggling with neighboring countries. In November 2019, Iran raised the gasoline prices by 50% and imposed a strict rationing system again (as in 2007). The prices per liter gasoline rose to 15,000 rials, where only 60 liters were permitted to private cars for a month. Besides, oil purchase beyond the limit would cost 30,000 rials per liter. Those prices are still well below target prices set in the subsidy reform plan, however. The policy changes came in effect to the
US sanctions The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
, and caused protests across the country. The result of the rationing, a year later, was reduced pollution and wasteful domestic consumption and increase in exports.


Services

Despite 1990s efforts towards economic liberalization, government spending, including expenditure by quasi-governmental foundations, remains high. Estimates of service sector spending in Iran are regularly more than two-fifths of GDP, much government-related, including military expenditures, government salaries, and social security disbursements. Urbanization contributed to service sector growth. Important service industries include public services (including education), commerce, personal services, professional services and tourism. 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.Rail-Freight Transport
''Iran Daily'', June 12, 2007. Retrieved February 12, 2008. February 4, 2011.
Projections based on 1996 employment figures compiled for the
International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...
suggest that Iran's transport and communications sector employed 3.4 million people, or 20.5% of the labor force in 2008.


Energy, gas, and petroleum

Energy In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...

Electricity: *''production:'' 258 billion kWh (2014) *''consumption:'' 218 billion kWh (2014) *''exports:'' 9.7 billion kWh (2014) *''imports:'' 3.8 billion kWh (2014) Electricity production by source: Image: Iran-electricity.gif, left, Iran plans to generate 23,000 MW of electricity through
nuclear technology Nuclear technology is technology that involves the nuclear reactions of atomic nuclei. Among the notable nuclear technologies are nuclear reactors, nuclear medicine and nuclear weapons. It is also used, among other things, in smoke detectors an ...
by 2025 to meet its increasing demand for energy.
*''fossil fuels:'' 85.6% (2012) *''hydro:'' 12.4% (2012) *''other:'' 0.8% (2012) *''nuclear:'' 1.2% (2012) Oil: *''production:'' (2015) *''exports:'' (2013) *''imports:'' (2013) *''proved reserves:'' (2016) Natural gas: *''production:'' 174.5 km3 (2014) *''consumption:'' 170.2 km3 (2014) *''exports:'' 9.86 km3 (2014) *''imports:'' 6.886 km3 (2014) *''proved reserves:'' 34,020 km3 (2016)
Iran possesses 10% of the world's proven oil reserves and 15% of its
gas reserves Oil and gas reserves denote ''discovered'' quantities of crude oil and natural gas (oil or gas fields) that can be profitably produced/recovered from an approved development. Oil and gas reserves tied to approved operational plans filed on th ...
.Iran (data)
US Department of Energy (2011). Retrieved March 28, 2011.
Domestic oil and gas along with hydroelectric power facilities provide power. Energy wastage in Iran amounts to six or seven billion dollars per year, much higher than the international norm. Iran recycles 28% of its used oil and gas, whereas some other countries reprocess up to 60%.Energy Wastage In Iran Equals 6–7 Billion Dollars Per Year
IRNA The Islamic Republic News Agency ( fa, خبرگزاری جمهوری اسلامی, ''Xebergâzari-ye Jimhuri-ye Eslâmi-ye''), or IRNA, is the official news agency of the Islamic Republic of Iran. Founded on 13 November 1934 as Pars News Agency ...
, October 29, 2008. Retrieved November 2, 2008.
In 2008 Iran paid $84 billion in subsidies for oil, gas and electricity. It is the world's third largest consumer of natural gas after United States and Russia. In 2010 Iran completed its first nuclear power plant at Bushehr with Russian assistance. Iran has been a major oil exporter since 1913. The country's major oil fields lie in the central and southwestern parts of the western
Zagros The Zagros Mountains ( ar, جبال زاغروس, translit=Jibal Zaghrus; fa, کوه‌های زاگرس, Kuh hā-ye Zāgros; ku, چیاکانی زاگرۆس, translit=Çiyakani Zagros; Turkish: ''Zagros Dağları''; Luri: ''Kuh hā-ye Zāgro ...
mountains. Oil is also found in northern Iran and in the
Persian Gulf The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Persis, Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a Mediterranean sea (oceanography), me ...
. In 1978, Iran was the fourth largest oil producer,
OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headquart ...
's second largest oil producer and second largest exporter. Following the 1979 revolution the new government reduced production. A further decline in production occurred as result of damage to oil facilities during the Iraq-Iran war. Oil production rose in the late 1980s as pipelines were repaired and new
Gulf A gulf is a large inlet from the ocean into the landmass, typically with a narrower opening than a bay, but that is not observable in all geographic areas so named. The term gulf was traditionally used for large highly-indented navigable bodie ...
fields exploited. By 2004, annual oil production reached 1.4 billion barrels producing a net profit of $50 billion. Iranian Central Bank data show a declining trend in the share of Iranian exports from oil-products (FY 2006: 84.9%, 2007/2008: 86.5%, 2008/2009: 85.5%, 2009/2010: 79.8%, FY 2010 (first three quarters): 78.9%). Iranian officials estimate that Iran's annual oil and gas revenues could reach $250 billion by 2015 once current projects come on stream.Iran eyes $250 billion annual revenue in 5 years
Mehr News Agency, December 22, 2010. Retrieved December 22, 2010.
Pipelines move oil from the fields to the
refineries A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value. Types of refineries Different types of refineries ar ...
and to such exporting ports as Abadan, Bandar-e Mashur and
Kharg Island Kharg or Khark Island ( fa, جزیره خارک) is a continental island in the Persian Gulf belonging to Iran. The island is located off the coast of Iran and northwest of the Strait of Hormuz. Its total area is . Administered by the adjacent ...
. Since 1997, Iran's state-owned oil and gas industry has entered into major exploration and production agreements with foreign consortia. In 2008 the
Iranian Oil Bourse The Iranian Oil Bourse ( fa, بورس نفت ایران), International Oil Bourse, Iran Petroleum Exchange Kish Exchange or Oil Bourse in Kish (IOB; the official English language name is unclear) also known as Iran Crude Oil Exchange, is a commod ...
(IOB) was inaugurated in
Kish Island Kish ( fa, کیش ) is a resort island in Bandar Lengeh County, Hormozgān Province, off the southern coast of Iran in the Persian Gulf. Owing to its free trade zone status, the island is touted as a consumer's paradise, with numerous malls, ...
. The IOB trades petroleum, petrochemicals and gas in various currencies. Trading is primarily in the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
and rial along with other major currencies, not including the
US dollar The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
. According to the Petroleum Ministry, Iran plans to invest $500 billion in its oil sector by 2025.. ''Iran Daily'', April 24, 2008.


Retail and distribution

Iran's retail industry consists largely of cooperatives (many of them government-sponsored), and independent retailers operating in
bazaar A bazaar () or souk (; also transliterated as souq) is a marketplace consisting of multiple small Market stall, stalls or shops, especially in the Middle East, the Balkans, North Africa and India. However, temporary open markets elsewhere, suc ...
s. The bulk of food sales occur at street markets with prices set by the Chief Statistics Bureau. Iran has 438,478 small grocery retailers. These are especially popular in cities other than Tehran where the number of hypermarkets and supermarkets is still very limited. More mini-markets and supermarkets are emerging, mostly independent operations. The biggest chainstores are state-owned Etka, Refah, Shahrvand and Hyperstar Market. Electronic commerce in Iran passed the $1 billion mark in 2009. In 2012, Iranians spent $77 billion on food, $22 billion on clothes and $18.5 billion on outward tourism. In 2015, overall
consumer spending Consumer spending is the total money spent on final goods and services by individuals and households. There are two components of consumer spending: induced consumption (which is affected by the level of income) and autonomous consumption (which ...
and
disposable income Disposable income is total personal income minus current income taxes. In national accounts definitions, personal income minus personal current taxes equals disposable personal income. Subtracting personal outlays (which includes the major c ...
are projected at $176.4 billion and $287 billion respectively.


Healthcare and pharma

The constitution entitles Iranians to basic
health care Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
. By 2008, 73% of Iranians were covered by the voluntary national health insurance system. Although over 85% of the population use an insurance system to cover their drug expenses, the government heavily subsidizes pharmaceutical production/importation. The total market value of Iran's health and medical sector was $24 billion in 2002 and was forecast to rise to $50 billion by 2013.Iran Pharmaceuticals and Healthcare Report
Business Monitor International (Q2 2009). Retrieved March 24, 2010.
In 2006, 55 pharmaceutical companies in Iran produced 96% (quantitatively) of the medicines for a market worth $1.2 billion. This figure is projected to increase to $3.65 billion by 2013.


Tourism and travel

Although tourism declined significantly during the war with Iraq, it has subsequently recovered. About 1,659,000 foreign tourists visited Iran in 2004 and 2.3 million in 2009 mostly from Asian countries, including the republics of
Central Asia Central Asia, also known as Middle Asia, is a subregion, region of Asia that stretches from the Caspian Sea in the west to western China and Mongolia in the east, and from Afghanistan and Iran in the south to Russia in the north. It includes t ...
, while about 10% came from the European Union and North America. The most popular tourist destinations are Mazandaran,
Isfahan Isfahan ( fa, اصفهان, Esfahân ), from its Achaemenid empire, ancient designation ''Aspadana'' and, later, ''Spahan'' in Sassanian Empire, middle Persian, rendered in English as ''Ispahan'', is a major city in the Greater Isfahan Regio ...
,
Mashhad Mashhad ( fa, مشهد, Mašhad ), also spelled Mashad, is the List of Iranian cities by population, second-most-populous city in Iran, located in the relatively remote north-east of the country about from Tehran. It serves as the capital of R ...
and
Shiraz Shiraz (; fa, شیراز, Širâz ) is the List of largest cities of Iran, fifth-most-populous city of Iran and the capital of Fars province, Fars Province, which has been historically known as Pars (Sasanian province), Pars () and Persis. As o ...
. In the early 2000s the industry faced serious limitations in infrastructure, communications, industry standards and personnel training. Several organized tours from Germany, France and other European countries come to Iran annually to visit archaeological sites and monuments. In 2003 Iran ranked 68th in tourism revenues worldwide.Iran ranks 68th in tourism revenues worldwide
Payvand/IRNA, September 7, 2003. Retrieved February 12, 2008.
According to
UNESCO The United Nations Educational, Scientific and Cultural Organization is a specialized agency of the United Nations (UN) aimed at promoting world peace and security through international cooperation in education, arts, sciences and culture. It ...
and the deputy head of research for Iran Travel and Tourism Organization (ITTO), Iran is rated among the "10 most touristic countries in the world".
Domestic tourism Domestic tourism is tourism involving residents of one country traveling only within that country. Such a vacation is known as a domestic vacation (British: domestic holiday or holiday at home). For large countries with limited skill in foreign lan ...
in Iran is one of the largest in the world.


Banking, finance and insurance

Government loans and credits are available to industrial and agricultural projects, primarily through banks. Iran's unit of currency is the
rial Rial, riyal, or RIAL may refer to: * Rial (surname), a surname (and list of people with the name) * Royal Institution for the Advancement of Learning, McGill University * Rial Racing, a former German Formula One team Various currencies named rial ...
which had an average official exchange rate of 9,326 rials to the U.S. dollar in 2007. Rials are exchanged on the unofficial market at a higher rate. In 1979, the government nationalized private banks. The restructured banking system replaced interest on loans with handling fees, in accordance with
Islamic law Sharia (; ar, شريعة, sharīʿa ) is a body of religious law that forms a part of the Islamic tradition. It is derived from the religious precepts of Islam and is based on the sacred scriptures of Islam, particularly the Quran and the ...
. This system took effect in the mid-1980s. The
banking system A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Becaus ...
consists of a central bank, the
Bank Markazi The Central Bank of Iran (CBI), also known as ''Bank Markazi'', officially the Central Bank of the Islamic Republic of Iran ( fa, بانک مرکزی جمهوری اسلامی ايران, Bank Markazi-ye Jomhuri-ye Eslāmi-ye Irān; SWIFT Code: B ...
, which issues currency and oversees all state and private banks. Several commercial banks have branches throughout the country. Two development banks exist and a housing bank specializes in home mortgages. The government began to privatize the banking sector in 2001 when licenses were issued to two new privately owned banks. State-owned commercial banks predominantly make loans to the state, '' bonyad'' enterprises, large-scale private firms and four thousand wealthy/connected individuals. While most Iranians have difficulty obtaining small home loans, 90 individuals secured facilities totaling $8 billion. In 2009, Iran's General Inspection Office announced that Iranian banks held some $38 billion of delinquent loans, with capital of only $20 billion. Foreign transactions with Iran amounted to $150 billion of major contracts between 2000 and 2007, including private and government lines of credit. In 2007, Iran had $62 billion in assets abroad. 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. As of 2010, the
Tehran Stock Exchange The Tehran Stock Exchange (TSE) ( fa, بورس اوراق بهادار تهران, romanized: ''Burs-e Owraq-e Bahadar-e Tehran'') is Iran's largest stock exchange, which first opened in 1967. The TSE is based in Tehran. , 339 companies with a com ...
traded the shares of more than 330 registered companies. Listed companies were valued at $100 billion in 2011. Insurance premiums accounted for just under 1% of GDP in 2008, a figure partly attributable to low average income per head. Five state-owned insurance firms dominate the market, four of which are active in commercial insurance. The leading player is the Iran Insurance Company, followed by Asia, Alborz and Dana insurances. In 2001/02 third-party liability insurance accounted for 46% of premiums, followed by health insurance (13%), fire insurance (10%) and life insurance (9.9%).


Communications, electronics and IT

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. In 2008, there were 345 telephone lines and 106 personal computers for every 1,000 residents. Personal computers for home use became more affordable in the mid-1990s, since when demand for Internet access has increased rapidly. As of 2010, Iran also had the world's third largest number of
bloggers A blog (a truncation of "weblog") is a discussion or informational website published on the World Wide Web consisting of discrete, often informal diary-style text entries (posts). Posts are typically displayed in reverse chronological order ...
(2010). In 1998, the Ministry of Post, Telegraph & Telephone (later renamed the Ministry of Information & Communication Technology) began selling Internet accounts to the general public. In 2006, revenues from the Iranian telecom industry were estimated at $1.2 billion. In 2006, Iran had 1,223 Internet Service Providers (ISPs), all private sector operated. As of 2014, Iran has the largest mobile market in the Middle East, with 83.2 million mobile subscriptions and 8 million smart-phones in 2012. According to the World Bank, Iran's information and communications technology sector had a 1.4% share of GDP in 2008.ICT At-a-Glance, Iran's entry
. World Bank (login required). Retrieved February 4, 2011.
Around 150,000 people work in this sector, including 20,000 in the software industry. 1,200 IT companies were registered in 2002, 200 in software development. In 2014 software exports stood at $400 million. By the end of 2009, Iran's telecom market was the fourth-largest in the Middle East at $9.2 billion and was expected to reach $12.9 billion by 2014 at a compound annual growth rate of 6.9%.


Transport

Iran has an extensive paved road system linking most towns and all cities. In 2011, the country had of roads, of which 73% were paved. In 2007 there were approximately 100 passenger cars for every 1,000 inhabitants. Trains operated on of track. The country's major port of entry is
Bandar-Abbas Bandar Abbas or Bandar-e ‘Abbās ( fa, , , ), is a port city and capital of Hormozgān Province on the southern coast of Iran, on the Persian Gulf. The city occupies a strategic position on the narrow Strait of Hormuz (just across from Musan ...
on the
Strait of Hormuz The Strait of Hormuz ( fa, تنگه هرمز ''Tangeh-ye Hormoz'' ar, مَضيق هُرمُز ''Maḍīq Hurmuz'') is a strait between the Persian Gulf and the Gulf of Oman. It provides the only sea passage from the Persian Gulf to the ...
. After arriving in Iran, imported goods are distributed by trucks and freight trains. The Tehran–Bandar-Abbas railroad, opened in 1995, connects Bandar-Abbas to
Central Asia Central Asia, also known as Middle Asia, is a subregion, region of Asia that stretches from the Caspian Sea in the west to western China and Mongolia in the east, and from Afghanistan and Iran in the south to Russia in the north. It includes t ...
via Tehran and
Mashhad Mashhad ( fa, مشهد, Mašhad ), also spelled Mashad, is the List of Iranian cities by population, second-most-populous city in Iran, located in the relatively remote north-east of the country about from Tehran. It serves as the capital of R ...
. Other major ports include
Bandar Anzali Bandar-e Anzali ( fa, بندرانزلی, also Romanized as Bandar-e Anzalī; renamed as Bandar-e Pahlavi during the Pahlavi dynasty) is a city of Gilan Province, Iran. At the 2011 census, its population was 144,664. Anzali is one of the mos ...
and
Bandar Torkaman Bandar Torkaman ( fa, بندرتركمن), formerly known as Bandar Shah ( fa, بَندَرِ شاه), is a city and capital of Torkaman County, Golestan Province, Iran. At the 2006 census its population was 45,045, in 9,755 families. Bandar To ...
on the Caspian Sea and Khoramshahr and
Bandar Imam Bandar-e Shahpour ( fa, بندر شاهپور) is a city and capital of Bandar-e Shahpour District of Mahshahr County, Khuzestan Province, Iran. As of the 2006 census, its population was 67,078, in 14,681 families. Bandar Shahpour is a port cit ...
Khomeini on the
Persian Gulf The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Persis, Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a Mediterranean sea (oceanography), me ...
. Dozens of cities have passenger and cargo airports.
Iran Air The National Airline of Iran ( fa, هواپیمايی ملی ایران, Havâpeymâyi-ye Melli-ye Irân), branded as Iran Air, is the flag carrier of Iran, which is headquartered at Mehrabad Airport in Tehran. As of 2018, it operates scheduled ...
, the national airline, was founded in 1962 and operates domestic and international flights. All large cities have bus transit systems and private companies provide intercity bus services. Tehran, Mashhad,
Shiraz Shiraz (; fa, شیراز, Širâz ) is the List of largest cities of Iran, fifth-most-populous city of Iran and the capital of Fars province, Fars Province, which has been historically known as Pars (Sasanian province), Pars () and Persis. As o ...
,
Tabriz Tabriz ( fa, تبریز ; ) is a city in northwestern Iran, serving as the capital of East Azerbaijan Province. It is the List of largest cities of Iran, sixth-most-populous city in Iran. In the Quri Chay, Quru River valley in Iran's historic Aze ...
,
Ahvaz Ahvaz ( fa, اهواز, Ahvâz ) is a city in the southwest of Iran and the capital of Khuzestan province. Ahvaz's population is about 1,300,000 and its built-up area with the nearby town of Sheybani is home to 1,136,989 inhabitants. It is hom ...
and Isfahan are constructing underground railways. More than one million people work in the transportation sector, accounting for 9% of 2008 GDP. In August 2022, President
Ebrahim Raisi Sayyid Ebrahim Raisolsadati ( fa, سید ابراهیم رئیس‌الساداتی; born 14 December 1960), commonly known as Ebrahim Raisi ( fa, ابراهیم رئیسی ), is an Iranian principlist politician, Muslim jurist, and the eight ...
’s cabinet approved a law to import fully assembled foreign cars. His predecessor President
Hassan Rouhani Hassan Rouhani ( fa, حسن روحانی, Standard Persian pronunciation: ; born Hassan Fereydoun ( fa, حسن فریدون, links=no); 12 November 1948) is an Iranian politician who served as the seventh president of Iran from 2013 to 2021. ...
, had outlawed such imports in July 2018 due to sanctions imposed on Iran. Regular Iranian citizens were unable to buy safe cars at affordable prices.


International trade

Iran is a founding member of
OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headquart ...
and the Organization of Gas Exporting Countries.
Petroleum Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crud ...
constitutes 56% of Iran's exports with a value of $60.2 billion in 2018. For the first time, the value of Iran's non-oil exports is expected to reach the value of imports at $43 billion in 2011.
Pistachio The pistachio (, ''Pistacia vera''), a member of the cashew family, is a small tree originating from Central Asia and the Middle East. The tree produces seeds that are widely consumed as food. ''Pistacia vera'' is often confused with other sp ...
s, liquefied propane, methanol (methyl alcohol), hand-woven carpets and
automobiles A car or automobile is a motor vehicle with wheels. Most definitions of ''cars'' say that they run primarily on roads, seat one to eight people, have four wheels, and mainly transport people instead of goods. The year 1886 is regarded as ...
are the major non-oil exports.
Copper Copper is a chemical element with the symbol Cu (from la, cuprum) and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a pinkis ...
,
cement A cement is a binder, a chemical substance used for construction that sets, hardens, and adheres to other materials to bind them together. Cement is seldom used on its own, but rather to bind sand and gravel ( aggregate) together. Cement mix ...
,
leather Leather is a strong, flexible and durable material obtained from the tanning, or chemical treatment, of animal skins and hides to prevent decay. The most common leathers come from cattle, sheep, goats, equine animals, buffalo, pigs and hogs, ...
,
textiles Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...
,
fruits In botany, a fruit is the seed-bearing structure in flowering plants that is formed from the ovary after flowering. Fruits are the means by which flowering plants (also known as angiosperms) disseminate their seeds. Edible fruits in particula ...
,
saffron Saffron () is a spice derived from the flower of ''Crocus sativus'', commonly known as the "saffron crocus". The vivid crimson stigma and styles, called threads, are collected and dried for use mainly as a seasoning and colouring agent i ...
and
caviar Caviar (also known as caviare; from fa, خاویار, khâvyâr, egg-bearing) is a food consisting of salt-cured roe of the family Acipenseridae. Caviar is considered a delicacy and is eaten as a garnish or a spread. Traditionally, the ter ...
are also export items of Iran. 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. Iranian firms have developed
energy In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...
, pipelines, irrigation, dams and
power generation Electricity generation is the process of generating electric power from sources of primary energy. For utilities in the electric power industry, it is the stage prior to its delivery ( transmission, distribution, etc.) to end users or its stor ...
in different countries. The country has made non-oil exports a priority by expanding its broad industrial base, educated and motivated workforce and favorable location, which gives it proximity to an estimated market of some 300 million people in
Caspian Caspian can refer to: *The Caspian Sea *The Caspian Depression, surrounding the northern part of the Caspian Sea *The Caspians, the ancient people living near the Caspian Sea *Caspian languages, collection of languages and dialects of Caspian peopl ...
, Persian Gulf and some ECO countries further east. Total import volume rose by 189% from $13.7 billion in 2000 to $39.7 billion in 2005 and $55.189 billion in 2009. Iran's major commercial partners are
China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
,
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
,
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
,
Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
,
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
,
France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...
,
Russia Russia (, , ), or the Russian Federation, is a List of transcontinental countries, transcontinental country spanning Eastern Europe and North Asia, Northern Asia. It is the List of countries and dependencies by area, largest country in the ...
and
Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...
. From 1950 until 1978, the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
was Iran's foremost economic and military partner, playing a major role in infrastructure and industry modernization.. Iran National Film Center (circa 1975). Retrieved January 20, 2010.. Iran National Film Center (circa 1975). Retrieved January 20, 2010. It is reported that around 80% of machinery and equipment in Iran is of German origin. In July 2018, France, Germany and UK agreed to continue trade with Iran without using Dollar as a medium of exchange. In March 2018, Iran had banned Dollar in trade. Since the mid-1990s, Iran has increased its economic cooperation with other
developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
in " south-south integration" including
Syria Syria ( ar, سُورِيَا or سُورِيَة, translit=Sūriyā), officially the Syrian Arab Republic ( ar, الجمهورية العربية السورية, al-Jumhūrīyah al-ʻArabīyah as-Sūrīyah), is a Western Asian country loc ...
, India, China,
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
,
Cuba Cuba ( , ), officially the Republic of Cuba ( es, República de Cuba, links=no ), is an island country comprising the island of Cuba, as well as Isla de la Juventud and several minor archipelagos. Cuba is located where the northern Caribbea ...
and
Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
. Iran's trade with India passed $13 billion in 2007, an 80% increase within a year. Iran is expanding its trade ties with
Turkey Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...
and
Pakistan Pakistan ( ur, ), officially the Islamic Republic of Pakistan ( ur, , label=none), is a country in South Asia. It is the world's List of countries and dependencies by population, fifth-most populous country, with a population of almost 24 ...
and shares with its partners the common objective to create a common market in West and Central Asia through ECO. Since 2003,
Iran Iran, officially the Islamic Republic of Iran, and also called Persia, is a country located in Western Asia. It is bordered by Iraq and Turkey to the west, by Azerbaijan and Armenia to the northwest, by the Caspian Sea and Turkmeni ...
has increased investment in neighboring countries such as Iraq and Afghanistan. In
Dubai Dubai (, ; ar, دبي, translit=Dubayy, , ) is the most populous city in the United Arab Emirates (UAE) and the capital of the Emirate of Dubai, the most populated of the 7 emirates of the United Arab Emirates.The Government and Politics of ...
,
UAE The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (The Middle East). It is located at th ...
, it is estimated that Iranian expatriates handle over 20% of its domestic economy and account for an equal proportion of its population. Migrant Iranian workers abroad remitted less than $2 billion home in 2006. Between 2005 and 2009, trade between Dubai and Iran tripled to $12 billion; money invested in the local real estate market and import-export businesses, collectively known as the ''
Bazaar A bazaar () or souk (; also transliterated as souq) is a marketplace consisting of multiple small Market stall, stalls or shops, especially in the Middle East, the Balkans, North Africa and India. However, temporary open markets elsewhere, suc ...
'', and geared towards providing Iran and other countries with required consumer goods. It is estimated that one third of Iran's imported goods and exports are delivered through the
black market A black market, underground economy, or shadow economy is a clandestine market or series of transactions that has some aspect of illegality or is characterized by noncompliance with an institutional set of rules. If the rule defines the se ...
, underground economy, and illegal jetties, thus damaging the economy.Wehrey, Frederic (2009)
"The Rise of the Pasdaran"
RAND Corporation The RAND Corporation (from the phrase "research and development") is an American nonprofit global policy think tank created in 1948 by Douglas Aircraft Company to offer research and analysis to the United States Armed Forces. It is financed ...
. Retrieved June 10, 2010.


Foreign direct investment

In the 1990s and early 2000s, indirect oilfield development agreements were made with foreign firms, including buyback contracts in the oil sector whereby the contractor provided project finance in return for an allocated production share. Operation transferred to
National Iranian Oil Company The National Iranian Oil Company (NIOC; fa, شرکت ملّی نفت ایران, Sherkat-e Melli-ye Naft-e Īrān) is a government-owned national oil and natural gas producer and distributor under the direction of the Ministry of Petroleum of Ir ...
(NIOC) after a set number of years, completing the contract. Unfavorable or complex operating requirements and
international sanctions International sanctions are political and economic decisions that are part of diplomatic efforts by countries, multilateral or regional organizations against states or organizations either to protect national security interests, or to protect in ...
have hindered foreign investment in the country, despite liberalization of relevant regulations in the early 2000s. Iran absorbed $24.3 billion of foreign investment between the
Iranian calendar The Iranian calendars or Iranian chronology ( fa, گاه‌شماری ایرانی, ) are a succession of calendars invented or used for over two millennia in Iran, also known as Persia. One of the longest chronological records in human history, ...
years 1993 and 2007. The EIU estimates that Iran's net FDI will rise by 100% between 2010 and 2014.The tragicomedy of Iran sanctions
Aljazeera, May 22, 2010. Retrieved May 22, 2010.
Foreign investors concentrated their activities in the energy, vehicle manufacture, copper mining, construction, utilities, petrochemicals, clothing, food and beverages, telecom and pharmaceuticals sectors. Iran is a member of the World Bank's
Multilateral Investment Guarantee Agency The Multilateral Investment Guarantee Agency (MIGA) is an international financial institution which offers political risk insurance and credit enhancement guarantees. These guarantees help investors protect foreign direct investments against ...
. In 2006, the combined net worth of
Iranian citizens abroad Iranian diaspora refers to Iranian people or those who are of Iranian ancestry living outside Iran.the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI), in 2008 Iran ranked 142 among 181 countries in working conditions. Iran stands at number 96 in terms of business start-ups, 165 in obtaining permits, 147 in employment, 147 in asset registration, 84 in obtaining credit, 164 in legal support for investments, 104 in tax payments, 142 in overseas trade, 56 in contract feasibility and 107 in bankruptcy. Firms from over 50 countries invested in Iran between 1992 and 2008, with Asia and Europe the largest participants as shown below: The economic impact of a partial lifting of sanctions extends beyond the energy sector; ''
The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' reported that "consumer-oriented companies, in particular, could find opportunity in this country with 81 million consumers, many of whom are young and prefer Western products".Clifford Krauss
A New Stream of Oil for Iran, but Not Right Away
''The New York Times'' (July 14, 2015).
The consumer-goods market is expected to grow by $100 billion by 2020. Iran is considered "a strong
emerging market An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were ...
play" by investment and trading firms.Clifford Krauss: A New Stream of Oil for Iran, but Not Right Away
''The New York Times'', July 14, 2015. Retrieved September 18, 2015.
Opening Iran's market place to foreign investment could also be a boon to competitive multinational firms operating in a variety of manufacturing and service sectors, worth $600 billion to $800 billion in new investment opportunities over the next decade.Asa Fitch: Post-Sanctions Iran Could Be A Turkey-Size Win for Investors
''The Wall Street Journal'', March 12, 2014. Retrieved March 13, 2014.
Dean A. DeRosa & Gary Clyde Hufbauer
"Normalization of Economic Relations"
(U.S.)
National Foreign Trade Council Founded in 1914, the National Foreign Trade Council (NFTC) is an American trade association advocating an open, rules-based international trade system. It serves its hundreds of member companies in activities encompassing international trade policy ...
. November 21, 2008. Retrieved March 30, 2012.


World Trade Organization

Iran has held observer status at the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and e ...
(WTO) since 2005. Although the United States has consistently blocked its bid to join the organization, observer status came in a goodwill gesture to ease nuclear negotiations between Iran and the international community. With exports of 60 products with revealed
comparative advantage In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. Comp ...
, Iran is the 65th " most complex country".Atlas: Iran
M.I.T The Massachusetts Institute of Technology (MIT) is a Private university, private Land-grant university, land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern t ...
(The Observatory of Economic Complexity). Retrieved December 15, 2016.
Should Iran eventually gain membership status in the WTO, among other prerequisites,
copyrights A copyright is a type of intellectual property that gives its owner the exclusive right to copy, distribute, adapt, display, and perform a creative work, usually for a limited time. The creative work may be in a literary, artistic, education ...
will have to be enforced in the country. This will require a major overhaul. The country is hoping to attract billions of dollars' worth of foreign investment by creating a more favorable investment climate through freer trade.
Free trade zone A free-trade zone (FTZ) is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re- exported under specific customs regulation and generally not subject to cus ...
s such as Qeshm,
Chabahar Chābahār ( fa, چابهار, bal, چھبار, čahbàr; ; formerly ''Bandar Beheshtī'') is the capital city of Chabahar County, Sistan and Baluchestan Province, Iran. It is a free port (free-trade zone) situated on the coast of the Gulf of ...
, and
Kish Island Kish ( fa, کیش ) is a resort island in Bandar Lengeh County, Hormozgān Province, off the southern coast of Iran in the Persian Gulf. Owing to its free trade zone status, the island is touted as a consumer's paradise, with numerous malls, ...
are expected to assist in this process. Iran allocated $20 billion in 2010 to loans for the launch of twenty trade centers in other countries.


International sanctions

See also Economic Recession in Iran After the
Iranian Revolution The Iranian Revolution ( fa, انقلاب ایران, Enqelâb-e Irân, ), also known as the Islamic Revolution ( fa, انقلاب اسلامی, Enqelâb-e Eslâmī), was a series of events that culminated in the overthrow of the Pahlavi dynas ...
in 1979, the United States ended its economic and diplomatic ties with Iran, banned Iranian oil imports and froze approximately $11 billion of its assets. In 1996, the U.S. Government passed the
Iran and Libya Sanctions Act The Iran and Libya Sanctions Act of 1996 (ILSA) was a 1996 act of the United States Congress that imposed economic sanctions on firms doing business with Iran and Libya. On September 20, 2004, the President signed an Executive Order to terminate ...
(ILSA) which prohibits U.S. (and non-U.S.) companies from investing and trading with Iran in amounts of more than $20 million annually. Since 2000 exceptions to this restriction have been made for items including
pharmaceuticals A medication (also called medicament, medicine, pharmaceutical drug, medicinal drug or simply drug) is a drug used to diagnose, cure, treat, or prevent disease. Drug therapy (pharmacotherapy) is an important part of the medical field and rel ...
and
medical equipment A medical device is any device intended to be used for medical purposes. Significant potential for hazards are inherent when using a device for medical purposes and thus medical devices must be proved safe and effective with reasonable assura ...
.
Iran's nuclear program The nuclear program of Iran is an ongoing scientific effort by Iran to research nuclear technology that can be used to make nuclear weapons. Iran has several research sites, two uranium mines, a research reactor, and uranium processing facili ...
has been the subject of contention with the West since 2006 over suspicions of its intentions. The
UN Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, and ...
imposed sanctions against select companies linked to the nuclear program, thus furthering the country's economic isolation.Farnaz Fassihi
Iran's Economy Feels Sting of Sanctions
''The Wall Street Journal'', October 12, 2010. Retrieved October 13, 2010.
The economic effects of sanctions have been severe. Sanctions notably bar nuclear, missile and many military exports to Iran and target investments in oil, gas and petrochemicals, exports of refined petroleum products, as well as the
Islamic Revolutionary Guard Corps The Islamic Revolutionary Guard Corps (IRGC; fa, سپاه پاسداران انقلاب اسلامی, Sepāh-e Pāsdārān-e Enghelāb-e Eslāmi, lit=Army of Guardians of the Islamic Revolution also Sepāh or Pasdaran for short) is a branch o ...
, banks, insurance,
financial transactions A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A ...
and
shipping Freight transport, also referred as ''Freight Forwarding'', is the physical process of transporting Commodity, commodities and merchandise goods and cargo. The term shipping originally referred to transport by sea but in American English, it h ...
. In 2012 the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
tightened its own sanctions by joining the three decade-old US oil embargo against Iran. In 2015, Iran and the
P5+1 P5 may refer to: In science and technology * 311P/PANSTARRS, also known as P/2013 P5 (PANSTARRS), an asteroid discovered by the Pan-STARRS telescope on 27 August 2013 * P5 Truss Segment, an element of the International Space Station * Period ...
reached a deal on the nuclear program that will remove the main sanctions by early 2016. Even though Iran can trade in its own currency some problems subsist mainly due to the fact that it cannot transact in
US dollars The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from Dollar, other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American ...
freely. In 2018, the
United States government The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, a city within a fede ...
unilaterally withdrew from the
JCPOA The Joint Comprehensive Plan of Action (JCPOA; fa, برنامه جامع اقدام مشترک , barnāmeye jāme'e eqdāme moshtarak (, ''BARJAM'')), commonly known as the Iran nuclear deal or Iran deal, is an agreement on the Iranian nuclear ...
agreement and re-imposed its sanctions on Iran's oil sales,
petrochemicals Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable sou ...
,
shipping Freight transport, also referred as ''Freight Forwarding'', is the physical process of transporting Commodity, commodities and merchandise goods and cargo. The term shipping originally referred to transport by sea but in American English, it h ...
, metals trading and banking transactions.


Effects

According to U.S. Undersecretary of State William J. Burns, Iran may be losing as much as $60 billion annually in energy investment. Sanctions are making imports 24% more costly on average. In addition, the latest round of sanctions could cost Iran annually $50 billion in lost oil revenues. Iran is increasingly using
barter trade In trade, barter (derived from ''baretor'') is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists distingu ...
because its access to the international dollar payment system has been denied. According to Iranian officials, large-scale withdrawal by international companies represents an "opportunity" for domestic companies to replace them. The IEA estimated that Iranian exports fell to a record of 860,000 bpd in September 2012 from 2.2 million bpd at the end of 2011. This fall led to a drop in revenues and clashes on the streets of Tehran when the local currency, the
rial Rial, riyal, or RIAL may refer to: * Rial (surname), a surname (and list of people with the name) * Royal Institution for the Advancement of Learning, McGill University * Rial Racing, a former German Formula One team Various currencies named rial ...
, collapsed. September 2012 output was Iran's lowest since 1988. According to the U.S. Iran could reduce the world price of crude petroleum by 10%, saving the United States annually $76 billion (at the proximate 2008 world oil price of $100/bbl). According to NIAC, sanctions cost the United States over $175 billion in lost trade and 279,000 lost job opportunities.Iran sanctions cost U.S. over $175b in lost trade: study
. ''Tehran Times'', July 15, 2014. Retrieved July 24, 2014.
Between 2010 and 2012, sanctions cost the E.U. states more than twice as much as the United States in terms of lost trade revenue. Germany was hit the hardest, losing between $23.1 and $73.0 billion between 2010–2012, with Italy and France following at $13.6-$42.8 billion and $10.9-$34.2 billion respectively. GDP growth turned negative in 2013 (−5%). The unofficial unemployment rate was 20% by mid-2012.
Oil exports This is a list of oil-producing countries by oil exports based on The World Factbook and other Sources. Many countries also import oil, and some import more oil than they export. Countries by rank Oil export revenues Academic contributi ...
dropped to 1.4 million bpd in 2014 from 2.5 million bpd in 2011. By 2013, Iran had $80 billion in foreign exchange reserves frozen overseas. Automobile production declined 40% between 2011 and 2013. According to the U.S. government in 2015, Iran's economy has reached a point where it is "fundamentally incapable of recovery" without a nuclear accommodation with the West.
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 Geopolitics (from Greek γῆ ''gê'' "earth, land" and πολιτική ''politikḗ'' "politics") is the study of the effects of Earth's geography (human and physical) on politics and international relations. While geopolitics usually refers to ...
and economic opportunities, if it is sustained if Iran and the US were to achieve a diplomatic breakthrough, geopolitical tensions in the
Middle East The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabian Peninsula, Arabia (including the Arabian Peninsula and Bahrain), Anatolia, Asia Minor (Asian part of Turkey except Hatay Pro ...
could decline sharply, and Iran could come to be perceived as a promising
emerging market An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were ...
in its own right.
In January 2019, President
Hassan Rouhani Hassan Rouhani ( fa, حسن روحانی, Standard Persian pronunciation: ; born Hassan Fereydoun ( fa, حسن فریدون, links=no); 12 November 1948) is an Iranian politician who served as the seventh president of Iran from 2013 to 2021. ...
blamed the US for Iran's declining economy. Following the US pullout from an international nuclear deal with Iran and re-imposed sanctions, Iran faced the toughest economic situation in 40 years. According to
Majlis ( ar, المجلس, pl. ') is an Arabic term meaning "sitting room", used to describe various types of special gatherings among common interest groups of administrative, social or religious nature in countries with linguistic or cultural conne ...
, this has caused damages estimated between 150 and 200 billion dollars to the Iranian economy.


See also

* Corruption in Iran * Electronic currency in Iran ** Virtual currency law in Iran *
Energy superpower An energy superpower is a country that supplies large amounts of energy resources (crude oil, natural gas, coal, etc.) to a significant number of other countries, and therefore has the potential to influence world markets to gain a political or ec ...
*
Foreign relations of Iran The foreign relations of Iran are the economic and diplomatic relationships between the Iranian government and governments of other countries. Geography is a very significant factor in informing Iran's foreign policy. Following the 1979 Iranian ...
*
Iranian calendar The Iranian calendars or Iranian chronology ( fa, گاه‌شماری ایرانی, ) are a succession of calendars invented or used for over two millennia in Iran, also known as Persia. One of the longest chronological records in human history, ...
* Iran's international rankings in economy *
Iranian targeted subsidy plan The economy of Iran includes a lot of subsidies. Food items, such as flour and cooking oil, are subsidized, along with fuels such as gasoline. However cutting subsidies can cause civil unrest. The Iranian targeted subsidy plan ( fa, طرح هدف ...
*
Smuggling in Iran Taxation in Iran is levied and collected by the Iranian National Tax Administration under the Ministry of Finance and Economic Affairs of the Government of Iran. In 2008, about 55% of the government's budget came from oil and natural gas reve ...
*
Venture capital in Iran Following the Iranian Revolution, Iran's banking system was transformed to be run on an Islamic interest-free basis. As of 2010 there were seven large government-run commercial banks. As of March 2014, Iran's banking assets made up over a third o ...
;Lists * List of Iranians by net worth *
List of Iranian companies This is a list of notable companies based in Iran. For listing criteria, see methodology section. Current companies *holding company Methodology Under a plan calledTop Iranian Companies the 100 top publicly traded Iranian corporations are chos ...
* List of Iranian economists *
List of major economic laws in Iran The list of major laws and legal acts affecting trade in goods and services in Iran as of 2009:Donya-e-Eqtesad ''Donya-e-Eqtesad'' ( fa, دنیای اقتصاد meaning "the World of Economics" in Persian) is an Iranian daily newspaper and book publisher. History and profile ''Donya-e-Eqtesad'' was founded in October 2002, and it has been published and ci ...
'' leading Iranian business newspaper *
Government of Iran The Government of the Islamic Republic of Iran ( fa, نظام جمهوری اسلامی ایران, Neẓām-e jomhūrī-e eslāmi-e Irān, known simply as ''Neẓām'' ( fa, نظام, lit=the system) among its supporters) is the ruling state a ...
with links to ministries and affiliated agencies * International Iranian Economic Association *
Iran Chamber of Commerce Industries and Mines The Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) is a non-profit non-governmental institution, established to facilitate economic growth and development in the country. ICCIMA is a forum in the field of industries, mines an ...
with links to information on commercial dispute resolution *
Ministry of Economic Affairs and Finance (Iran) The Ministry of Economic Affairs and Finance's functions are: *Manage the Iranian treasury department, *Lending by the government to banks in Iran, *Regulation of Iran's economy and its financial policy, *implementing & enforcing tax polici ...
**
Iranian National Tax Administration The Iranian National Tax Administration or in brief INTA is one of the organizations affiliated to the Ministry of Economic Affairs and Finance in Iran which is responsible for handling the country's tax affairs. Among the tasks of this organiz ...
*
Ministry of Industries and Business (Iran) The Ministry of Industry, Mine and Trade ( fa, Vezārate Sannat, Madan va Tejārat) is an Iranian government body responsible for the regulation and implementation of policies applicable to domestic and foreign trade and also regulation and imple ...
merger of
Ministry of Commerce A Ministry of Trade and Industry, Ministry of Commerce, Ministry of Commerce and Industry or variations is a ministry that is concerned with a nation's trade, industry and commerce. Notable examples are: List *Algeria: Ministry of Industry and M ...
with Ministry of Industries and Mines *
Ministry of Petroleum (Iran) The Ministry of Petroleum (MOP) ( fa, وزارت نفت, Vezârat-e Naft) manages the oil industry, the producer of oil and petrochemical products. MoP is in charge of all issues pertaining to exploration, extraction, exploitation, distribution ...
*
National Development Fund The National Development Fund of Iran (NDFI) ( fa, صندوق توسعه ملی) is Iran's sovereign wealth fund. It was founded in 2011 to supplement the Oil Stabilization Fund. NDFI is independent of the government's budget. Based on Article ...
Iran's
sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such ...
* Ravand Institute Iran's " Davos Forum" *
Supreme Audit Court of Iran The Supreme Audit Court of Iran (SAC) (Persian: دیوان محاسبات کشور) is a government agency of the Islamic Republic of Iran. Located in Tehran, it is supervised by the Iranian Parliament and dates back to 1906. Articles 54 and 55 ...


Notes


General references

;''Encyclopedia Iranica'' entries * * * ;Articles * * * * * * * * * * * * * * * * * ;Books * * * * * * * * * * * * ;Governments * * * * * * * * * * ;Papers * * * * * * * * * * * * * * * *


External links

;General
BBC
Iran in Maps (Population, land and infrastructure)
DMOZ
Business and Economy of Iran (Open Directory)
''Financial Tribune''
Iran's economic and business newspaper (in English)
Pars Times
Iran Business Resources (Comprehensive list of resources on the Internet relating to Iran and its economy) ; Governments
Ministry of Economic Affairs and Finance Of Iran
Official Website
Ministry of Industry, Mine & Trade of Iran
Official Website
Central Bank of Iran
Detailed statistics about Iran's economy and sectors, including national accounts and annual reviews
High Council of Iran Free Trade-Industrial Zone
Official site with information on Iran's Free Trade Zones
Organization For Investment, Economic and Technical Assistance of Iran
Government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...
"one-stop institution" for foreign direct investment in Iran (Including information on labor laws, taxation and customs)
Trade Promotion Organization of Iran
Many useful information about trade, FDI, economic reports, customs, laws, statistics, links and opportunities for investors in Iran (Affiliated to Iran's Ministry of Commerce)
Austrade
Iran Profile (Many practical information and sector specific reports, with useful websites and resources. Login required for sector reports)
U.K. Department for International Trade
Doing business in Iran (Trade and export guide)
U.S. Central Intelligence Agency: Iran's entry
The World Factbook ''The World Factbook'', also known as the ''CIA World Factbook'', is a reference resource produced by the Central Intelligence Agency (CIA) with almanac-style information about the countries of the world. The official print version is available ...

U.S. Department of Energy: Iran's entry
Oil, gas, electricity, data, profile, analysis and resources ; Publications and statistics
American Enterprise Institute
Global Investment in Iran (Indicative list of major international companies investing in Iran broken down by their nationality, sector of activity and amount invested)
Business Monitor International
Iran Business Forecast Report (Login required for sector reports)
Business Year – Iran
(VIP interviews, economic data, sector reports, investment opportunities)
Economist Intelligence Unit: Iran's entry
Forecast, factsheet, regulation, economic data & structure (Login required for some reports)

Analysis, reports and recommendations for Iran
Statistical Center of Iran
Statistics by topic, database and metadata
Turquoise Partners
'' Iran Investment Monthly'' (Reports on the
Tehran Stock Exchange The Tehran Stock Exchange (TSE) ( fa, بورس اوراق بهادار تهران, romanized: ''Burs-e Owraq-e Bahadar-e Tehran'') is Iran's largest stock exchange, which first opened in 1967. The TSE is based in Tehran. , 339 companies with a com ...
and Iran's economy)
World Bank
Social and economic indicators for Iran {{good article
Iran Iran, officially the Islamic Republic of Iran, and also called Persia, is a country located in Western Asia. It is bordered by Iraq and Turkey to the west, by Azerbaijan and Armenia to the northwest, by the Caspian Sea and Turkmeni ...