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Afghanistan vs. Iran

Economy

AfghanistanIran
Economy - overview

Prior to 2001, Afghanistan was an extremely poor, landlocked, and foreign aid-dependent country. Increased domestic economic activity occurred following the US-led invasion, as well as significant international economic development assistance. This increased activity expanded access to water, electricity, sanitation, education, and health services, and fostered consistent growth in government revenues since 2014. While international security forces have been drawing down since 2012, with much higher U.S. forces’ drawdowns occurring since 2017, economic progress continues, albeit uneven across sectors and key economic indicators. After recovering from the 2018 drought and growing 3.9% in 2019, political instability, expiring international financial commitments, and the COVID-19 pandemic have wrought significant adversity on the Afghan economy, with a projected 5% contraction.

Current political parties’ power-sharing agreement following the September 2019 presidential elections as well as ongoing Taliban attacks and peace talks have led to Afghan economic instability. This instability, coupled with expiring international grant and assistance, endangers recent fiscal gains and has led to more internally displaced persons. In November 2020, Afghanistan secured $12 billion in additional international aid for 2021-2025, much of which is conditional upon Taliban peace progress. Additionally, Afghanistan continues to experience influxes of repatriating Afghanis, mostly from Iran, significantly straining economic and security institutions.

Afghanistan’s trade deficit remains at approximately 31% of GDP and is highly dependent on financing through grants and aid. While Afghan agricultural growth remains consistent, recent industrial and services growth have been enormously impacted by COVID-19 lockdowns and trade cessations. While trade with the People’s Republic of China has rapidly expanded in recent years, Afghanistan still relies heavily upon India and Pakistan as export partners but is more diverse in its import partners. Furthermore, Afghanistan still struggles to effectively enforce business contracts, facilitate easy tax collection, and enable greater international trade for domestic enterprises.

Current Afghan priorities focus on the following goals:

  • Securing international economic agreements, many of which are contingent on Taliban peace progress;
  • Increasing exports to $2 billion USD by 2023;
  • Continuing to expand government revenue collection;
  • Countering corruption and navigating challenges from the power-sharing agreement; and
  • Developing a strong private sector that can empower the economy.

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.

GDP (purchasing power parity)$78.557 billion (2019 est.)

$75.6 billion (2018 est.)

$74.711 billion (2017 est.)

note: data are in 2017 dollars
$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
GDP - real growth rate2.7% (2017 est.)

2.2% (2016 est.)

1% (2015 est.)
3.7% (2017 est.)

12.5% (2016 est.)

-1.6% (2015 est.)
GDP - per capita (PPP)$2,065 (2019 est.)

$2,034 (2018 est.)

$2,058 (2017 est.)

note: data are in 2017 dollars
$12,389 (2019 est.)

$13,472 (2018 est.)

$14,536 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 23% (2016 est.)

industry: 21.1% (2016 est.)

services: 55.9% (2016 est.)

note: data exclude opium production
agriculture: 9.6% (2016 est.)

industry: 35.3% (2016 est.)

services: 55% (2017 est.)
Population below poverty line54.5% (2016 est.)18.7% (2007 est.)
Household income or consumption by percentage sharelowest 10%: 3.8%

highest 10%: 24% (2008)
lowest 10%: 2.6%

highest 10%: 29.6% (2005)
Inflation rate (consumer prices)5% (2017 est.)

4.4% (2016 est.)
10% (2017 est.)

9.6% (2017 est.)

9.1% (2016 est.)

note: official Iranian estimate
Labor force8.478 million (2017 est.)30.5 million (2017 est.)

note: shortage of skilled labor
Labor force - by occupationagriculture: 44.3%

industry: 18.1%

services: 37.6% (2017 est.)
agriculture: 16.3%

industry: 35.1%

services: 48.6% (2013 est.)
Unemployment rate23.9% (2017 est.)

22.6% (2016 est.)
11.8% (2017 est.)

12.4% (2016 est.)

note: data are Iranian Government numbers
Distribution of family income - Gini index29.4 (2008)40.8 (2017 est.)
Budgetrevenues: 2.276 billion (2017 est.)

expenditures: 5.328 billion (2017 est.)
revenues: 74.4 billion (2017 est.)

expenditures: 84.45 billion (2017 est.)
Industriessmall-scale production of bricks, textiles, soap, furniture, shoes, fertilizer, apparel, food products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copperpetroleum, 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, armaments
Industrial production growth rate-1.9% (2016 est.)3% (2017 est.)
Agriculture - productswheat, milk, grapes, vegetables, potatoes, watermelons, melons, rice, onions, appleswheat, sugar cane, milk, sugar beet, tomatoes, barley, potatoes, oranges, poultry, apples
Exports$784 million (2017 est.)

$614.2 million (2016 est.)

note: not including illicit exports or reexports
$101.4 billion (2017 est.)

$83.98 billion (2016 est.)
Exports - commoditiesgold, grapes, opium, fruits and nuts, insect resins, cotton, handwoven carpets, soapstone, scrap metal (2019)crude petroleum, polymers, industrial alcohols, iron, pistachios (2019)
Exports - partnersUnited Arab Emirates 45%, Pakistan 24%, India 22%, China 1% (2019)China 48%, India 12%, South Korea 8%, Turkey 6%, United Arab Emirates 5% (2019)
Imports$7.616 billion (2017 est.)

$6.16 billion (2016 est.)
$76.39 billion (2017 est.)

$63.14 billion (2016 est.)
Imports - commoditieswheat flours, broadcasting equipment, refined petroleum, rolled tobacco, aircraft parts, synthetic fabrics (2019)rice, corn, broadcasting equipment, soybean products, beef (2019)
Imports - partnersUnited Arab Emirates 23%, Pakistan 17%, India 13%, China 9%, United States 9%, Uzbekistan 7%, Kazakhstan 6% (2019)China 28%, United Arab Emirates 20%, India 11%, Turkey 7%, Brazil 6%, Germany 5% (2019)
Debt - external$284 million (FY10/11)$7.995 billion (31 December 2017 est.)

$8.196 billion (31 December 2016 est.)
Exchange ratesafghanis (AFA) per US dollar -

7.87 (2017 est.)

68.03 (2016 est.)

67.87 (2015)

61.14 (2014 est.)

57.25 (2013 est.)
Iranian 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.)
Fiscal year21 December - 20 December21 March - 20 March
Public debt7% of GDP (2017 est.)

7.8% of GDP (2016 est.)
39.5% of GDP (2017 est.)

47.5% of GDP (2016 est.)

note: includes publicly guaranteed debt
Reserves of foreign exchange and gold$7.187 billion (31 December 2017 est.)

$6.901 billion (31 December 2015 est.)
$120.6 billion (31 December 2017 est.)

$133.7 billion (31 December 2016 est.)
Current Account Balance$1.014 billion (2017 est.)

$1.409 billion (2016 est.)
$9.491 billion (2017 est.)

$16.28 billion (2016 est.)
GDP (official exchange rate)$20.24 billion (2017 est.)$581.252 billion (2019 est.)
Taxes and other revenues11.2% (of GDP) (2017 est.)17.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-15.1% (of GDP) (2017 est.)-2.3% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 17.6%

male: 16.3%

female: 21.4% (2017)
total: 27.7%

male: 24.4%

female: 40% (2018 est.)
GDP - composition, by end usehousehold consumption: 81.6% (2016 est.)

government consumption: 12% (2016 est.)

investment in fixed capital: 17.2% (2016 est.)

investment in inventories: 30% (2016 est.)

exports of goods and services: 6.7% (2016 est.)

imports of goods and services: -47.6% (2016 est.)
household 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.)
Gross national saving22.7% of GDP (2017 est.)

25.8% of GDP (2016 est.)

21.4% of GDP (2015 est.)
37.9% of GDP (2017 est.)

37.6% of GDP (2016 est.)

35.2% of GDP (2015 est.)

Source: CIA Factbook