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Iran vs. Turkey

Economy

IranTurkey
Economy - overview

Iran's economy is marked by statist policies, inefficiencies, and reliance on oil and gas exports, but Iran also possesses significant agricultural, industrial, and service sectors. The Iranian government directly owns and operates hundreds of state-owned enterprises and indirectly controls many companies affiliated with the country's security forces. Distortions - including corruption, price controls, subsidies, and a banking system holding billions of dollars of non-performing loans - weigh down the economy, undermining the potential for private-sector-led growth.

Private sector activity includes small-scale workshops, farming, some manufacturing, and services, in addition to medium-scale construction, cement production, mining, and metalworking. Significant informal market activity flourishes and corruption is widespread.

The lifting of most nuclear-related sanctions under the Joint Comprehensive Plan of Action (JCPOA) in January 2016 sparked a restoration of Iran's oil production and revenue that drove rapid GDP growth, but economic growth declined in 2017 as oil production plateaued. The economy continues to suffer from low levels of investment and declines in productivity since before the JCPOA, and from high levels of unemployment, especially among women and college-educated Iranian youth.

In May 2017, the re-election of President Hasan RUHANI generated widespread public expectations that the economic benefits of the JCPOA would expand and reach all levels of society. RUHANI will need to implement structural reforms that strengthen the banking sector and improve Iran's business climate to attract foreign investment and encourage the growth of the private sector. Sanctions that are not related to Iran's nuclear program remain in effect, and these-plus fears over the possible re-imposition of nuclear-related sanctions-will continue to deter foreign investors from engaging with Iran.

Turkey's largely free-market economy is driven by its industry and, increasingly, service sectors, although its traditional agriculture sector still accounts for about 25% of employment. The automotive, petrochemical, and electronics industries have risen in importance and surpassed the traditional textiles and clothing sectors within Turkey's export mix. However, the recent period of political stability and economic dynamism has given way to domestic uncertainty and security concerns, which are generating financial market volatility and weighing on Turkey's economic outlook.

Current government policies emphasize populist spending measures and credit breaks, while implementation of structural economic reforms has slowed. The government is playing a more active role in some strategic sectors and has used economic institutions and regulators to target political opponents, undermining private sector confidence in the judicial system. Between July 2016 and March 2017, three credit ratings agencies downgraded Turkey's sovereign credit ratings, citing concerns about the rule of law and the pace of economic reforms.

Turkey remains highly dependent on imported oil and gas but is pursuing energy relationships with a broader set of international partners and taking steps to increase use of domestic energy sources including renewables, nuclear, and coal. The joint Turkish-Azerbaijani Trans-Anatolian Natural Gas Pipeline is moving forward to increase transport of Caspian gas to Turkey and Europe, and when completed will help diversify Turkey's sources of imported gas.

After Turkey experienced a severe financial crisis in 2001, Ankara adopted financial and fiscal reforms as part of an IMF program. The reforms strengthened the country's economic fundamentals and ushered in an era of strong growth, averaging more than 6% annually until 2008. An aggressive privatization program also reduced state involvement in basic industry, banking, transport, power generation, and communication. Global economic conditions and tighter fiscal policy caused GDP to contract in 2009, but Turkey's well-regulated financial markets and banking system helped the country weather the global financial crisis, and GDP growth rebounded to around 9% in 2010 and 2011, as exports and investment recovered following the crisis.

The growth of Turkish GDP since 2016 has revealed the persistent underlying imbalances in the Turkish economy. In particular, Turkey's large current account deficit means it must rely on external investment inflows to finance growth, leaving the economy vulnerable to destabilizing shifts in investor confidence. Other troublesome trends include rising unemployment and inflation, which increased in 2017, given the Turkish lira's continuing depreciation against the dollar. Although government debt remains low at about 30% of GDP, bank and corporate borrowing has almost tripled as a percent of GDP during the past decade, outpacing its emerging-market peers and prompting investor concerns about its long-term sustainability.

GDP (purchasing power parity)$1,027,238,000,000 (2019 est.)

$1.102 trillion (2018 est.)

$1,172,665,000,000 (2017 est.)

note: data are in 2017 dollars
$2,371,374,000,000 (2019 est.)

$2,349,836,000,000 (2018 est.)

$2,282,304,000,000 (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate3.7% (2017 est.)

12.5% (2016 est.)

-1.6% (2015 est.)
0.98% (2019 est.)

3.04% (2018 est.)

7.54% (2017 est.)
GDP - per capita (PPP)$12,389 (2019 est.)

$13,472 (2018 est.)

$14,536 (2017 est.)

note: data are in 2017 dollars
$28,424 (2019 est.)

$28,545 (2018 est.)

$28,141 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 9.6% (2016 est.)

industry: 35.3% (2016 est.)

services: 55% (2017 est.)
agriculture: 6.8% (2017 est.)

industry: 32.3% (2017 est.)

services: 60.7% (2017 est.)
Population below poverty line18.7% (2007 est.)14.4% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 2.6%

highest 10%: 29.6% (2005)
lowest 10%: 2.1%

highest 10%: 30.3% (2008)
Inflation rate (consumer prices)10% (2017 est.)

9.6% (2017 est.)

9.1% (2016 est.)

note: official Iranian estimate
15.4% (2019 est.)

16.2% (2018 est.)

11.1% (2017 est.)
Labor force30.5 million (2017 est.)

note: shortage of skilled labor
25.677 million (2020 est.)

note: this number is for the domestic labor force only; number does not include about 1.2 million Turks working abroad, nor refugees
Labor force - by occupationagriculture: 16.3%

industry: 35.1%

services: 48.6% (2013 est.)
agriculture: 18.4%

industry: 26.6%

services: 54.9% (2016)
Unemployment rate11.8% (2017 est.)

12.4% (2016 est.)

note: data are Iranian Government numbers
13.68% (2019 est.)

11% (2018 est.)
Distribution of family income - Gini index40.8 (2017 est.)41.9 (2018 est.)

43.6 (2003)
Budgetrevenues: 74.4 billion (2017 est.)

expenditures: 84.45 billion (2017 est.)
revenues: 172.8 billion (2017 est.)

expenditures: 185.8 billion (2017 est.)
Industriespetroleum, petrochemicals, gas, fertilizer, caustic soda, textiles, cement and other construction materials, food processing (particularly sugar refining and vegetable oil production), ferrous and nonferrous metal fabrication, armamentstextiles, food processing, automobiles, electronics, mining (coal, chromate, copper, boron), steel, petroleum, construction, lumber, paper
Industrial production growth rate3% (2017 est.)9.1% (2017 est.)
Agriculture - productswheat, sugar cane, milk, sugar beet, tomatoes, barley, potatoes, oranges, poultry, applesmilk, wheat, sugar beet, tomatoes, barley, maize, potatoes, grapes, watermelons, apples
Exports$101.4 billion (2017 est.)

$83.98 billion (2016 est.)
$310.671 billion (2019 est.)

$296.288 billion (2018 est.)

$271.866 billion (2017 est.)
Exports - commoditiescrude petroleum, polymers, industrial alcohols, iron, pistachios (2019)cars and vehicle parts, refined petroleum, delivery trucks, jewelry, clothing and apparel (2019)
Exports - partnersChina 48%, India 12%, South Korea 8%, Turkey 6%, United Arab Emirates 5% (2019)Germany 9%, United Kingdom 6%, Iraq 5%, Italy 5%, United States 5% (2019)
Imports$76.39 billion (2017 est.)

$63.14 billion (2016 est.)
$258.385 billion (2019 est.)

$272.933 billion (2018 est.)

$291.523 billion (2017 est.)
Imports - commoditiesrice, corn, broadcasting equipment, soybean products, beef (2019)gold, refined petroleum, crude petroleum, vehicle parts, scrap iron (2019)
Imports - partnersChina 28%, United Arab Emirates 20%, India 11%, Turkey 7%, Brazil 6%, Germany 5% (2019)Germany 11%, China 9%, Russia 9%, United States 5%, Italy 5% (2019)
Debt - external$7.995 billion (31 December 2017 est.)

$8.196 billion (31 December 2016 est.)
$438.677 billion (2019 est.)

$454.251 billion (2018 est.)
Exchange ratesIranian rials (IRR) per US dollar -

32,769.7 (2017 est.)

30,914.9 (2016 est.)

30,914.9 (2015 est.)

29,011.5 (2014 est.)

25,912 (2013 est.)
Turkish liras (TRY) per US dollar -

7.81925 (2020 est.)

5.8149 (2019 est.)

5.28905 (2018 est.)

2.72 (2014 est.)

2.1885 (2013 est.)
Fiscal year21 March - 20 Marchcalendar year
Public debt39.5% of GDP (2017 est.)

47.5% of GDP (2016 est.)

note: includes publicly guaranteed debt
28.3% of GDP (2017 est.)

28.3% of GDP (2016 est.)
Reserves of foreign exchange and gold$120.6 billion (31 December 2017 est.)

$133.7 billion (31 December 2016 est.)
$107.7 billion (31 December 2017 est.)

$106.1 billion (31 December 2016 est.)
Current Account Balance$9.491 billion (2017 est.)

$16.28 billion (2016 est.)
$8.561 billion (2019 est.)

-$20.745 billion (2018 est.)
GDP (official exchange rate)$581.252 billion (2019 est.)$760.028 billion (2019 est.)
Ease of Doing Business Index scoresOverall score: 58.5 (2020)

Starting a Business score: 67.8 (2020)

Trading score: 66.2 (2020)

Enforcement score: 58.2 (2020)
Overall score: 76.8 (2020)

Starting a Business score: 88.8 (2020)

Trading score: 91.6 (2020)

Enforcement score: 71.4 (2020)
Taxes and other revenues17.3% (of GDP) (2017 est.)20.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-2.3% (of GDP) (2017 est.)-1.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 27.7%

male: 24.4%

female: 40% (2018 est.)
total: 25.2%

male: 22.4%

female: 30.3% (2019 est.)
GDP - composition, by end usehousehold consumption: 49.7% (2017 est.)

government consumption: 14% (2017 est.)

investment in fixed capital: 20.6% (2017 est.)

investment in inventories: 14.5% (2017 est.)

exports of goods and services: 26% (2017 est.)

imports of goods and services: -24.9% (2017 est.)
household consumption: 59.1% (2017 est.)

government consumption: 14.5% (2017 est.)

investment in fixed capital: 29.8% (2017 est.)

investment in inventories: 1.1% (2017 est.)

exports of goods and services: 24.9% (2017 est.)

imports of goods and services: -29.4% (2017 est.)
Gross national saving37.9% of GDP (2017 est.)

37.6% of GDP (2016 est.)

35.2% of GDP (2015 est.)
26% of GDP (2019 est.)

27.7% of GDP (2018 est.)

26% of GDP (2017 est.)

Source: CIA Factbook