Iran Economy Profile 2009

Economy - overview

Iran's economy is marked by an inefficient state sector, reliance on the oil sector, which provides the majority of government revenues, and statist policies, which create major distortions throughout the system. Most economic activity is controlled by the state. Private sector activity is typically limited to small-scale workshops, farming, and services. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Significant informal market activity flourishes. Corruption and shortages of goods are widespread. President Mahmud AHMADI-NEJAD has proposed reforms to Iran's system of price controls and subsidies, particularly on food and energy. However, previous government-led efforts at reform - such as fuel rationing in July 2007 and the imposition of the Value-Added Tax (VAT) in October 2008 - were met with stiff resistance and violent protests. High oil prices in recent years allowed Iran to greatly increase its export earnings and amass nearly $100 billion in foreign exchange reserves. But with oil prices currently below $40 per barrel, the Iranian government is facing difficulties. Tehran has formulated a 2009 budget that anticipates lower oil prices. The government has drawn down the country's Oil Stabilization Fund, and may be dipping into foreign exchange reserves. Iran continues to suffer from double-digit unemployment and inflation - inflation climbed to a 28% annual rate in 2008. Underemployment among Iran's educated youth has convinced many to seek jobs overseas, resulting in a significant "brain drain."

GDP (purchasing power parity)

$841.7 billion (2008 est.)
$790.4 billion (2007 est.)
$733 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$344.8 billion (2008 est.)

GDP - real growth rate

6.5% (2008 est.)
7.8% (2007 est.)
5.8% (2006 est.)

GDP - per capita (PPP)

$12,800 (2008 est.)
$12,100 (2007 est.)
$11,300 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 10.2%
industry: 41.9%
services: 47.8% (2008 est.)

Population below poverty line

18% (2007 est.)

Labor force

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

Labor force - by occupation

agriculture: 25%
industry: 31%
services: 45% (June 2007)

Unemployment rate

12.5% (2008 est.)
12% (2007 est.)
note: data are according to the Iranian Government

Household income or consumption by percentage share

lowest 10%: 2.6%
highest 10%: 29.6% (2005)

Distribution of family income - Gini index

44.5 (2006)

Investment (gross fixed)

26.3% of GDP (2008 est.)

Budget

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

Public debt

19.7% of GDP (2008 est.)
27% of GDP (2004 est.)

Inflation rate (consumer prices)

25.6% (2008 est.)
17.1% (2007 est.)
note: official Iranian estimate

Commercial bank prime lending rate

NA% (31 December 2008)
12% (31 December 2007)

Stock of money

$NA (31 December 2008)
$46.13 billion (31 December 2007)

Stock of quasi money

$NA (31 December 2008)
$68.71 billion (31 December 2007)

Stock of domestic credit

$NA (31 December 2008)
$109.7 billion (31 December 2007)

Industries

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

Industrial production growth rate

4.5% excluding oil (2008 est.)

Electricity - production

193 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 97.1%
hydro: 2.9%
nuclear: 0%
other: 0% (2001)

Electricity - consumption

145 billion kWh (2006 est.)

Electricity - exports

2.775 billion kWh (2006 est.)

Electricity - imports

2.54 billion kWh (2006 est.)

Oil - production

4.7 million bbl/day (2007 est.)

Oil - consumption

1.6 million bbl/day (2007 est.)

Oil - imports

210,000 bbl/day (2007)

Oil - exports

2.8 million bbl/day (2007 est.)

Oil - proved reserves

136.2 billion bbl based on Iranian claims (1 January 2008 est.)

Natural gas - production

111.9 billion cu m (2007 est.)

Natural gas - consumption

111.8 billion cu m (2007 est.)

Natural gas - exports

6.2 billion cu m (2007 est.)

Natural gas - imports

6.1 billion cu m (2007 est.)

Natural gas - proved reserves

26.85 trillion cu m (1 January 2008 est.)

Current Account Balance

$16.66 billion (2008 est.)
$34.08 billion (2007 est.)

Agriculture - products

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

Exports

$95.09 billion (2008 est.)
$97.4 billion (2007 est.)

Exports - commodities

petroleum 80%, chemical and petrochemical products, fruits and nuts, carpets

Exports - partners

China 18.5%, Japan 15.4%, Turkey 6.9%, South Korea 6.8%, Italy 4.9% (2008)

Imports

$67.25 billion (2008 est.)
$56.58 billion (2007 est.)

Imports - commodities

industrial raw materials and intermediate goods, capital goods, foodstuffs and other consumer goods, technical services

Imports - partners

China 13.5%, UAE 9.8%, Germany 9.1%, South Korea 6.1%, Russia 5.6%, Italy 5.1%, France 4.2% (2008)

Reserves of foreign exchange and gold

$96.56 billion (31 December 2008 est.)
$82.06 billion (31 December 2007 est.)

Debt - external

$21.92 billion (31 December 2008 est.)
$20.68 billion (31 December 2007 est.)

Stock of direct foreign investment - at home

$6.954 billion (31 December 2008 est.)
$6.054 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad

$993 million (31 December 2008 est.)
$903 million (31 December 2007 est.)

Market value of publicly traded shares

$NA (31 December 2008)
$45.57 billion (31 December 2007)
$37.94 billion (31 December 2006)

Economic aid - recipient

$104 million (2005 est.)

Currency (code)

Iranian rial (IRR)

Currency (code)

IRR

Exchange rates

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

Fiscal year

21 March - 20 March