Economic overview Iran, in 36 editions.

Since the 1979 revolution, the banks, petroleum industry, transportation, utilities, and mining have been nationalized, but the new five-year plan--the first since the revolution--passed in January 1990, calls for the transfer of many government-controlled enterprises to the private sector. War-related disruptions, Disruptions from the bitter war with Iraq, massive corruption, mismanagement, demographic pressures, and ideological rigidities have kept economic growth at depressed levels. Oil accounts for over 90% of export revenues. A combination of war damage and low oil prices brought a 2% drop in GNP in 1988. GNP probably rose slightly in 1989, considerably short of the 3.4% 3.2% population growth rate in 1989. Heating oil and gasoline are rationed. Agriculture has suffered from the war, land reform, and shortages of equipment and materials. The five-year plan seeks to reinvigorate the economy by increasing the role of the private sector, boosting nonoil income, and securing foreign loans. The plan is overly ambitious but probably will generate some short-term relief.

Iran's economy is a mixture of central planning, state ownership of oil and
other large enterprises, village agriculture, and small-scale private
trading and service ventures. After a decade of economic decline, Iran's GNP
real GDP grew roughly 4% by 10% in FY90 and 10% 6% in FY91. FY91, according to Iranian Government
statistics. An oil windfall in 1990 combined
with a substantial increase in
imports contributed to Iran's recent economic
growth. Iran has also begun
implementing a number of economic reforms to
reduce government intervention
(including subsidies) and has allocated
substantial resources to development
projects in the hope of stimulating the
economy. Nevertheless, lower Lower oil revenues in 1991
- oil accounts for more
than 90% of export revenues and provides roughly 65% of the financing for
the five-year economic development plan - and dramatic increases together with a surge
in external imports greatly weakened Iran's international financial position. By
debt are threatening development plans and could prompt mid-1992 Iran was unable to cut imports, meet its obligations to foreign creditors.
thus limiting economic growth in Subsequently the medium term. government has tried to boost oil exports, curb imports
(especially of consumer goods), and renegotiate terms of its foreign debts.

Iran's economy is a mixture of central planning, state
ownership of
oil and other large enterprises, village agriculture, and small-scale
small-scale private trading and service ventures. Over the past
several years, the
government has introduced several measures to
liberalize the economy
and reduce government intervention, but most of
these changes have
moved slowly because of political opposition. Iran
has faced
increasingly severe financial difficulties in 1992-93 since mid-1992
due to an import
surge since that began in 1989 and general financial
mismanagement. At yearend 1993
the Iranian Government estimated that
it owed foreign creditors about
$30 billion; an estimated $8 billion
of this debt was in arrears. At yearend 1994, Iran rescheduled $12
billion in debt. Earnings from oil exports--which exports - which provide over 90% of
Iran's export
revenues--are revenues - are providing less relief to Iran than usual
because of
declining reduced oil prices. Estimated overall growth was a robust 6.3% in
1992 and a moderate 3% in 1993.

Iran's economy is a mixture of central
planning, state
ownership of oil and other large enterprises,
village agriculture, and
small-scale private trading and service
ventures. Over the past
several years, the government has introduced
several measures to
liberalize the economy and reduce government
intervention, but most of
these changes have moved slowly or have
been reversed because of political opposition. Iran
has faced
increasingly severe financial difficulties since mid-1992
due to an
import surge that began in 1989 and general financial
mismanagement.
At yearend 1993 the Iranian Government estimated that
it owed
foreign creditors about $30 billion; an estimated $8 billion
of this
debt was in arrears. At yearend 1994, Iran rescheduled $12
billion
in debt. Earnings from oil exports - which provide 90% 85% of
Iran's
export revenues - are providing less relief to Iran than usual
because of reduced oil prices. Iran's financial situation will
remain tight in 1996 because the bulk of payments due under its
rescheduling agreements in 1993-94 will be coming due.

Iran's economy is a mixture of central
planning,
state ownership of oil and other large enterprises,
village
agriculture, and small-scale private trading and service
ventures. Over the past several years,
Under President RAFSANJANI, the government has introduced adopted a number of market
several measures reforms to liberalize the economy and reduce government
intervention, the state's role in the economy, but most of these
changes have moved slowly or have
been reversed because of political
opposition. In the early 1990s, Iran has faced
increasingly severe experienced a financial difficulties since mid-1992 due to an crisis
caused by an import surge that began in 1989 and general financial mismanagement.
At yearend 1993 the Iranian Government estimated that it owed
foreign creditors about $30 billion; an estimated $8 billion of this
debt was in arrears. At yearend 1994, mismanagement. In 1993-1994, Iran rescheduled $12 $15 billion in debt,
with the bulk of payments due in debt. Earnings from 1996-97. The strong oil exports market in
1996 has helped ease financial pressures, however, and Tehran has so
far made timely debt service payments. In 1996, Iran's oil earnings -
which provide account for 85% of Iran's
total export revenues - are providing less relief to Iran than usual climbed 20% from the
because of reduced oil prices. previous year. Iran's financial situation will
remain tight in 1996 because through
the bulk end of the decade, and continued timely debt service payments due under its will
rescheduling agreements depend, in 1993-94 will be coming due. part, on persistent strong oil prices during the next few
years.

Iran's economy is a mixture of central planning,
state ownership of oil and other large enterprises, village
agriculture, and small-scale private trading and service ventures.
Under Newly elected President RAFSANJANI, KHATAMI has continued to follow the government adopted a number of market
reforms to reduce the state's role in the economy, but most reform plans of these former President RAFSANJANI and has indicated that he
changes have moved slowly or have been reversed because will pursue diversification of political
opposition. Iran's oil-reliant economy. In the
early 1990s, Iran experienced a financial crisis
caused by an import surge that began in 1989 and general financial was forced to
mismanagement. In 1993-1994, Iran rescheduled reschedule $15 billion in debt,
with the bulk of payments due in 1996-97. debt. The strong oil market in
1996 has helped
ease financial pressures, however, pressures on Iran and Tehran has so
far made allowed for Tehran's timely debt
service payments. In 1996, Iran's oil earnings -
which account for 85% of total export revenues - climbed 20% from the
previous year. Iran's financial situation will remain tight through tightened in 1997 and
the end early 1998 because of the decade, lower oil prices. Iran may be forced to decrease
imports and continued timely slow debt service payments will
depend, in part, on persistent strong oil prices during repayments if the next few
years. oil market worsens further.

Iran's economy is a mixture of central planning,
planning, state ownership of oil and other large enterprises, village
village agriculture, and small-scale private trading and service ventures.
Newly elected ventures. President KHATAMI has continued to follow the market
reform plans of former President RAFSANJANI and has indicated that he
he will pursue diversification of Iran's oil-reliant economy. economy
although he has made little progress toward that goal. In the
early
1990s, Iran experienced a financial crisis and was forced to
reschedule $15 billion in debt. The strong oil market in 1996 helped
ease financial pressures on Iran and allowed for Tehran's timely debt
debt service payments. Iran's financial situation tightened in 1997 and
early and deteriorated further in 1998 because of lower oil prices. As a
result Iran may be forced has begun to decrease
cut imports and slow fall into arrears on its
debt repayments if the oil market worsens further. payments.

Iran's economy is a mixture of central
planning, state ownership of oil and other large enterprises,
village agriculture, and small-scale private trading and service
ventures. President KHATAMI has continued to follow the market
reform plans of former President RAFSANJANI and has indicated that
he will pursue diversification of Iran's oil-reliant economy
although he has made little progress toward that goal. In the early
1990s, Iran experienced a financial crisis and was forced to
reschedule $15 billion in debt. The strong oil market in 1996 helped
ease financial pressures on Iran and allowed for Tehran's timely
debt service payments. Iran's financial situation tightened in 1997
and deteriorated further in 1998 because of lower oil prices. As a
result The subsequent zoom in oil prices in 1999 afforded Iran has begun to cut imports and fall into arrears on its
debt payments. fiscal breathing room but does not solve Iran's structural economic problems.

Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. President KHATAMI has continued to follow the market reform plans of former President RAFSANJANI and has indicated that he will pursue diversification of Iran's oil-reliant economy although he has made little progress toward that goal. The strong oil market in 1996 helped ease financial pressures on Iran and allowed for Tehran's timely debt service payments. Iran's financial situation tightened in 1997 and deteriorated further in 1998 because of lower oil prices. The subsequent zoom in oil prices in 1999 1999-2000 afforded Iran fiscal breathing room but does not solve Iran's structural economic problems. problems, including the encouragement of foreign investment.

Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. President KHATAMI has continued to follow the market reform plans of former President RAFSANJANI and has indicated that he will pursue diversification of Iran's oil-reliant economy although he has made little progress toward that goal. The strong oil market in 1996 helped ease financial pressures on Iran and allowed for Tehran's timely debt service payments. Iran's financial situation tightened in 1997 and deteriorated further in 1998 because of lower oil prices. The subsequent zoom Subsequent rises in oil prices in 1999-2000 have afforded Iran fiscal breathing room but does do not solve Iran's structural economic problems, including the encouragement of foreign investment. investment and the containment of inflation.

Iran's economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. President KHATAMI has continued to follow the market reform plans of former President RAFSANJANI and has indicated that he will pursue diversification of Iran's oil-reliant economy although he has made little progress toward that goal. The strong oil market in 1996 helped ease financial pressures on Iran and allowed for Tehran's timely debt service payments. Iran's financial situation tightened in 1997 and deteriorated further in 1998 because of lower oil prices. Subsequent rises in Relatively high oil prices in recent years have afforded enabled Iran fiscal breathing room to amass some $15 billion in foreign exchange reserves, but do have not solve solved Iran's structural economic problems, including the encouragement of foreign investment high unemployment and the containment of inflation.

Iran's economy is marked by a mixture of central planning, bloated, inefficient state ownership of sector, over reliance on the oil and other large enterprises, village agriculture, sector, and statist policies that create major distortions throughout. Most economic activity is controlled by the state. Private sector activity is typically small-scale private trading - workshops, farming, and service ventures. services. President KHATAMI has continued to follow the market reform plans of former President RAFSANJANI and has indicated that he will pursue diversification of Iran's oil-reliant economy although he has made little progress toward that goal. RAFSANJANI, with limited progress. Relatively high oil prices in recent years have enabled Iran to amass some $15 $22 billion in foreign exchange reserves, but have not solved Iran's structural eased economic problems, including hardships such as high unemployment and inflation. In December 2003 a major earthquake devastated the city of Bam in southeastern Iran, killing more than 30,000 people.

Iran's economy is marked by a bloated, inefficient state sector, over reliance on the oil sector, and statist policies that create major distortions throughout. Most economic activity is controlled by the state. Private sector activity is typically small-scale - workshops, farming, and services. President KHATAMI has continued to follow the market reform plans of former President RAFSANJANI, with limited progress. Relatively high oil prices in recent years have enabled Iran to amass some $22 $30 billion in foreign exchange reserves, but have not eased economic hardships such as high unemployment and inflation. In December 2003 a major earthquake devastated The proportion of the city economy devoted to the development of Bam in southeastern Iran, killing more than 30,000 people. weapons of mass destruction remains a contentious issue with leading Western nations.

Iran's economy is marked by a bloated, inefficient state sector, over reliance on the oil sector, and statist policies that create major distortions throughout. Most economic activity is controlled by the state. Private sector activity is typically small-scale - workshops, farming, and services. President KHATAMI Mahmud AHMADI-NEJAD has continued to follow the market reform plans of former President RAFSANJANI, with limited progress. Relatively high oil prices in recent years have enabled Iran to amass some $30 $40 billion in foreign exchange reserves, but have not eased economic hardships such as high unemployment and inflation. The proportion of the economy devoted to the development of weapons of mass destruction remains a contentious issue with leading Western nations.

Iran's economy is marked by a bloated, inefficient state sector, over reliance on the oil sector, and statist policies that create major distortions throughout. Most economic activity is controlled by the state. Private sector activity is typically small-scale - workshops, farming, and services. President Mahmud AHMADI-NEJAD has continued to follow the market reform plans of former President RAFSANJANI, with limited progress. Relatively high oil prices in recent years have enabled Iran to amass some $40 nearly $60 billion in foreign exchange reserves, but have not eased economic hardships such as high unemployment and inflation. The proportion of the economy devoted to the development of weapons of mass destruction remains a contentious issue with leading Western nations.

Iran's economy is marked by a bloated, an inefficient state sector, over reliance on the oil sector, sector (which provides 85% of government revenues), and statist policies that create major distortions throughout. Most economic activity is controlled by the state. Private sector activity is typically small-scale workshops, farming, and services. President Mahmud AHMADI-NEJAD has continued failed to follow make any notable progress in fulfilling the market reform plans goals of former President RAFSANJANI, with limited progress. Relatively high the nation's latest five-year plan. A combination of price controls and subsidies, particularly on food and energy, continue to weigh down the economy, and administrative controls, widespread corruption, and other rigidities undermine the potential for private-sector-led growth. As a result of these inefficiencies, significant informal market activity flourishes and shortages are common. High oil prices in recent years have enabled Iran to amass nearly $60 $70 billion in foreign exchange reserves, but have reserves. Yet this increased revenue has not eased economic hardships such as high hardships, which include double-digit unemployment and inflation. The proportion of the economy devoted inflation - inflation climbed to the development 26% as of weapons June 2008. The economy has seen only moderate growth. Iran's educated population, economic inefficiency and insufficient investment - both foreign and domestic - have prompted an increasing number of mass destruction remains a contentious issue with leading Western nations. Iranians to seek employment overseas, resulting in significant "brain drain."

Iran's economy is marked by an inefficient state sector, reliance on the oil sector (which sector, which provides 85% the majority of government revenues), revenues, and statist policies that policies, which create major distortions throughout. throughout the system. Most economic activity is controlled by the state. Private sector activity is typically limited to small-scale workshops, farming, and services. President Mahmud AHMADI-NEJAD failed to make any notable progress in fulfilling the goals of the nation's latest five-year plan. A combination of price controls and Price controls, subsidies, particularly on food and energy, continue to other rigidities weigh down the economy, and administrative controls, widespread corruption, and other rigidities undermine undermining the potential for private-sector-led growth. As a result of these inefficiencies, significant Significant informal market activity flourishes flourishes. Corruption and shortages of goods are common. 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 have enabled allowed Iran to greatly increase its export earnings and amass nearly $70 $100 billion in foreign exchange reserves. Yet this increased revenue But with oil prices currently below $40 per barrel, the Iranian government is facing difficulties. Tehran has not eased economic hardships, which include formulated a 2009 budget that anticipates lower oil prices. The government has drawn down the country's Oil Stabilization Fund, and may be dipping into foreign exchange reserves. Iran continues to suffer from double-digit unemployment and inflation - inflation climbed to 26% as of June a 28% annual rate in 2008. The economy has seen only moderate growth. Underemployment among Iran's educated population, economic inefficiency and insufficient investment - both foreign and domestic - have prompted an increasing number of Iranians youth has convinced many to seek employment jobs overseas, resulting in a significant "brain drain."

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. The legislature in late 2009 passed President Mahmud AHMADI-NEJAD has proposed reforms AHMADI-NEJAD's bill to Iran's system of price controls and reduce subsidies, particularly on food and energy. However, previous government-led efforts at reform The bill would phase out subsidies - such as fuel rationing in July 2007 which benefit Iran's upper and middle classes the imposition most - over three to five years and replace them with cash payments to Iran's lower classes. However, the start of the Value-Added Tax (VAT) program was delayed repeatedly throughout 2010 over fears of public reaction to higher prices. This is the most extensive economic reform since the government implemented gasoline rationing in October 2008 - were met with stiff resistance and violent protests. High 2007. The recovery of world oil prices in recent years allowed Iran to greatly increase its the last year increased Iran's oil export earnings and amass nearly $100 revenue by at least $10 billion in foreign exchange reserves. But with oil prices currently below $40 per barrel, over 2009, easing some of the Iranian government is facing difficulties. Tehran has formulated a 2009 budget that anticipates lower oil prices. The government financial impact of the newest round of international sanctions. Although inflation has drawn down fallen substantially since the country's Oil Stabilization Fund, and may be dipping into foreign exchange reserves. mid-2000s, Iran continues to suffer from double-digit unemployment and inflation - inflation climbed to a 28% annual rate in 2008. underemployment. Underemployment among Iran's educated youth has convinced many to seek jobs overseas, resulting in a significant "brain drain."

Iran's economy is marked by statist policies and an inefficient state sector, which create major distortions throughout the system, and reliance on the oil sector, oil, which provides the majority of government revenues, and statist policies, which create major distortions throughout the system. Private sector activity is typically limited to small-scale workshops, farming, and services. revenues. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Private sector activity is typically limited to small-scale workshops, farming, and services. Significant informal market activity flourishes. The legislature flourishes and corruption is widespread. Tehran since the early 1990s has recognized the need to reduce these inefficiencies, and in late 2009 December 2010 the legislature passed President Mahmud AHMADI-NEJAD's bill Targeted Subsidies Law (TSL) to reduce subsidies, particularly state subsidies on food and energy. The bill would phase out subsidies - which benefit Iran's upper and middle classes the most - over three to five years and replace them with cash payments to Iran's lower classes. However, the start of the program was delayed repeatedly throughout 2010 over fears of public reaction to higher prices. This is was the most extensive economic reform since the government implemented gasoline rationing in 2007. The recovery Over a five-year period the bill will phase out subsidies that previously cost Tehran $60-$100 billion annually and mostly benefited Iran's upper and middle classes. Cash payouts of $45 per person to more than 90% of Iranian households mitigated initial widespread resistance to the TSL program, though popular acceptance remains vulnerable to rising inflation. A rise in world oil prices in the last year 2011 increased Iran's oil export revenue by at least $10 roughly $28 billion over 2009, 2010, easing some of the financial impact of the newest round of international sanctions. Although inflation has fallen substantially since However, expansionary fiscal and monetary policies, government mismanagement, the mid-2000s, sanctions, and a depreciating currency are fueling inflation, and GDP growth remains stagnant. Iran also continues to suffer from double-digit unemployment and underemployment. Underemployment among Iran's educated youth has convinced many to seek jobs overseas, resulting in a significant "brain drain."

Iran's economy is marked by statist policies and an inefficient state sector, which create major distortions throughout the system, and reliance on oil, which provides the majority a large share of government revenues. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Private sector activity is typically limited to small-scale workshops, farming, some manufacturing, and services. Significant informal market activity flourishes and corruption is widespread. Tehran since the early 1990s has recognized the need to reduce these inefficiencies, and in December 2010 the legislature Majles passed President Mahmud AHMADI-NEJAD's Targeted Subsidies Law (TSL) to reduce state subsidies on food and energy. This was the most extensive economic reform since the government implemented gasoline rationing in 2007. Over a five-year period the bill will legislation sought to phase out subsidies that previously cost Tehran $60-$100 billion annually and mostly benefited Iran's Iran''s upper and middle classes. Cash payouts of $45 per person to more than 90% of Iranian households mitigated initial widespread resistance to the TSL program, though popular acceptance remains vulnerable to rising inflation. A rise program. However, inflation in world oil prices 2012 reached its highest level in 2011 increased Iran's oil export revenue by roughly $28 billion over 2010, easing some four years, eroding the value of these cash payouts and motivating the financial impact Majles to halt planned price increases for the second half of international sanctions. However, expansionary 2012 through at least March 2013. New fiscal and monetary policies, constraints on Tehran, following international sanctions in January against Iran''s Central Bank and oil exports, significantly reduced Iran''s oil revenue, forced government mismanagement, the sanctions, spending cuts, and fueled a depreciating 20% currency are fueling inflation, and GDP depreciation. Economic growth remains stagnant. turned negative for the first time in two decades. Iran also continues to suffer from double-digit unemployment and underemployment. Underemployment among Iran's Iran''s educated youth has convinced many to seek jobs overseas, resulting in a significant "brain drain."

Iran's economy is marked by statist policies and policies, an inefficient state sector, which create major distortions throughout the system, and reliance on oil, which provides a large share major source of government revenues. Price controls, subsidies, and other rigidities distortions weigh down the economy, undermining the potential for private-sector-led growth. Private sector activity is typically limited to small-scale workshops, farming, some manufacturing, and services. Significant informal market activity flourishes and corruption is widespread. Tehran since the early 1990s has recognized the need to reduce these inefficiencies, and in December 2010 the Majles passed President Mahmud AHMADI-NEJAD's Targeted Subsidies Law (TSL) to reduce state subsidies on food and energy. This was the most extensive economic reform since the government implemented gasoline rationing in 2007. Over a five-year period the legislation sought to phase out subsidies that previously cost Tehran $60-$100 billion annually and mostly benefited Iran''s upper and middle classes. Cash payouts of $45 per person to more than 90% of Iranian households mitigated initial widespread resistance to the TSL program. However, inflation in 2012 reached its highest level in four years, eroding the value of these cash payouts and motivating the Majles to halt planned price increases for the second half of 2012 through at least March 2013. New fiscal and monetary constraints on Tehran, following the expansion of international sanctions in January 2012 against Iran''s Iran's Central Bank and oil exports, significantly reduced Iran''s Iran's oil revenue, forced government spending cuts, and fueled a 20% 60% currency depreciation. Economic growth turned negative in 2012 and 2013, for the first time in two decades. Iran also continues to suffer from double-digit unemployment and underemployment. Underemployment among Iran''s educated youth Lack of job opportunities has convinced many educated Iranian youth to seek jobs overseas, resulting in a significant "brain drain." However, the election of President Hasan RUHANI in June 2013 brought about widespread expectations of economic improvements and greater international engagement among the Iranian public, and early in Ruhani's term the country saw a strengthened national currency and a historic boost to market values at the Tehran Stock Exchange.

Iran's economy is marked by statist policies, an inefficient state sector, inefficiencies, and reliance on oil, a major source of oil and gas exports, but Iran also possesses significant agricultural, industrial, and service sectors. The Iranian government revenues. Price directly owns and operates hundreds of state-owned enterprises and indirectly controls many companies affiliated with the country's security forces. Distortions - including inflation, price controls, subsidies, and other distortions 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 is typically limited to includes small-scale workshops, farming, some manufacturing, and services. services, in addition to medium-scale construction, cement production, mining, and metalworking. Significant informal market activity flourishes and corruption is widespread. New fiscal Fiscal and monetary constraints on Tehran, constraints, following the expansion of international sanctions in 2012 against on Iran's Central Bank and oil exports, significantly reduced Iran's oil revenue, forced government spending cuts, and fueled sparked a 60% sharp currency depreciation. Economic growth turned negative in 2012 and 2013, Iran’s economy contracted for the first time in two decades. decades during both 2012 and 2013, and grew only slightly 2014. Iran continues to suffer from double-digit high unemployment and underemployment. Lack of job opportunities has convinced prompted many educated Iranian youth to seek jobs employment overseas, resulting in a significant "brain drain." However, In June 2013, the election of President Hasan RUHANI in June 2013 brought about generated widespread public expectations of economic improvements improvement and greater international engagement among engagement. In connection with ongoing international negotiations over Iran’s nuclear program the Iranian public, and early in Ruhani's term limited sanctions relief for Iran provided under the country saw a strengthened national currency and a historic boost Joint Plan of Action of November 2013, helped to market values at forestall the Tehran Stock Exchange. decline in the economy in 2014.

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 inflation, 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.
Fiscal and monetary constraints, following the expansion of international sanctions in 2012 on Iran's Central Bank and oil exports, significantly reduced Iran's oil revenue, forced government spending cuts, and sparked a sharp currency depreciation. Iran’s economy contracted for the first time in two decades during both 2012 and 2013, and grew only slightly but growth resumed in 2014. Iran continues to suffer from high unemployment and underemployment. Lack of job opportunities has prompted many educated Iranian youth to seek employment overseas, resulting in a significant "brain drain."
In June 2013, the election of President Hasan RUHANI generated widespread public expectations of economic improvement and greater international engagement. In connection with ongoing international negotiations over Iran’s nuclear program Almost two years into his term, RUHANI has achieved some success, including reining in inflation and, in July of 2015, securing the limited promise of sanctions relief for Iran provided under by signing the Joint Comprehensive Plan of Action of November 2013, helped to forestall (JCPOA) with the decline P5+1. The JCPOA, which severely limits Iran’s nuclear program in the economy exchange for unfreezing Iranian assets and reopening Iran to international trade, should bolster foreign direct investment, increase trade, and stimulate growth. In spite of RUHANI’s efforts, Iran’s growth was tepid in 2014. 2015, and significant economic improvement resulting from sanctions relief will take months or years to materialize.

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 inflation, 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.
Fiscal and monetary constraints, following the expansion of international sanctions in 2012 on Iran's Central Bank and oil exports, significantly reduced Iran's oil revenue, forced government spending cuts, and sparked a sharp currency depreciation. Iran’s economy contracted for the first time in two decades during both 2012 and 2013, but growth resumed in 2014. Iran's stock market plunged between 2013 and 2015. Iran continues to suffer from high unemployment and underemployment. Lack of job opportunities has prompted many educated Iranian youth to seek employment overseas, resulting in a significant "brain drain."
In June 2013, the election of President Hasan RUHANI generated widespread public expectations of economic improvement and greater international engagement. Almost two years into his term, RUHANI has achieved some success, including reining in inflation and, in July of 2015, securing the promise of sanctions relief for Iran by signing the Joint Comprehensive Plan of Action (JCPOA) with the P5+1. The JCPOA, which severely limits Iran’s nuclear program in exchange for unfreezing Iranian assets and reopening Iran to international trade, should bolster foreign direct investment, increase trade, and stimulate growth. In spite of RUHANI’s efforts, Iran’s growth was tepid in 2015, and significant economic improvement resulting from sanctions relief will take months or years to materialize.

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 inflation, 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.
Fiscal and monetary constraints, following the expansion The lifting of international most nuclear-related sanctions under the Joint Comprehensive Plan of Action (JCPOA) in 2012 on Iran's Central Bank and oil exports, significantly reduced Iran's oil revenue, forced government spending cuts, and January 2016 sparked a sharp currency depreciation. restoration of Iran’s economy contracted for the first time in two decades during both 2012 oil production and 2013, revenue that drove rapid GDP growth, but economic growth resumed declined in 2014. Iran's stock market plunged between 2013 and 2015. Iran 2017 as oil production plateaued. The economy continues to suffer from high unemployment low levels of investment and underemployment. Lack declines in productivity since before the JCPOA, and from high levels of job opportunities has prompted many educated unemployment, especially among women and college-educated Iranian youth to seek employment overseas, resulting in a significant "brain drain."
youth. In June 2013, May 2017, the election re-election of President Hasan RUHANI generated widespread public expectations of that the economic improvement and greater international engagement. RUHANI has achieved some success, including reining in inflation and, in July benefits of 2015, securing the promise JCPOA would expand and reach all levels of sanctions relief for Iran by signing society. RUHANI will need to implement structural reforms that strengthen the Joint Comprehensive Plan banking sector and improve Iran’s business climate to attract foreign investment and encourage the growth of Action (JCPOA) with the P5+1. The JCPOA, which severely limits private sector. Sanctions that are not related to Iran’s nuclear program remain in exchange for unfreezing Iranian assets effect, and reopening Iran these—plus fears over the possible re-imposition of nuclear-related sanctions—will continue to international trade, should bolster deter foreign direct investment, increase trade, and stimulate growth. investors from engaging with Iran.

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.