Iran

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

Iran's today’s economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private ventures. The economy has been growing steadily for last several years, thanks mainly to rising oil prices. The GDP growth rate was 4.9% in 2006, 6% in 2007 with a forecast of 6% for 2008. In order to diversify its economy and become less dependent on oil sector, the government is opening selected key sectors to foreign investors but the progress has been slow. Iran’s sensitive political environment (due to its dispute with the international community over nuclear activities) is the main hurdle in attracting foreign investments. Social tensions are also high because of a growing unemployment rate; estimated at 15% of the active population (higher in younger generation). Inflation is high; estimated at 19% in 2007.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	161.26	188.48	222.39	278.14e	324.63e
GDP (constant prices, annual % change)	5.1	4.4	4.9	6.0e	6.0e
GDP per capita (USD)	2,359.10	2,747.51	3,187.60e	3,920.07e	4,498.87e
Inflation rate (%)	15.2	12.1	13.6	19.0e	17.7e
Unemployment rate (% of the labor force)	10.3	11.5	n.c.	n.c.	n.c.
Current Account (billions USD)	1.44	16.64	19.41	21.02e	21.34e
Current Account (in % of GDP)	0.9	8.8	8.7	7.6e	6.6e

Source: IMF - World Economic Outlook Database; ILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

Socio-demographic indicators	2004	2005
Unemployment rate (%)	10.3	11.5

Source:

Main sectors of industry

The agriculture sector contributes nearly 10% to the GDP but employs one-third of the active population. Only 10% of the land is arable and primitive farming methods are used. The main crops are pistachios (world largest producer), wheat, rice, oranges, tea, and cotton. Illicit cultivation of the opium poppy is fairly common. Iran is rich in mineral resources, mainly: copper (5% of the global reserves), oil (4th largest producer in the world) and gas (2nd largest producer in the world). The oil sector generates almost 50% of the total State revenue. The industrial sector contributes nearly 45% to the GDP. Textiles industry is the second most important after oil sector. Other major industries are sugar refining, food-processing, petrochemicals, cement, and building & construction. Traditional handicrafts such as carpet weaving and the manufacture of ceramics, silk, and jewellery are also important to the economy. The services sector is growing and contributes nearly 45% to the GDP.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	4.0	7.0	5.3
Value added (in % of GDP)	10.4	44.6	45.0
Employment by sector (in % of total employment)	24.9	30.4	44.6

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	6,906.96	8,193.89	8,613.99	8,963.96	9,170.94

Source: World Bank - World Development Indicators

Foreign trade in figures

Iran is a member of the Organization of Petroleum Exporting Countries (OPEC). The share of foreign trade in country’s GDP is nearly 60%; with oil accounting for 80% of the export revenues. The top three export partners are: Japan, Italy and France. Besides oil, Iran mainly exports fruits & nuts, iron & steel, organic chemicals, textiles and carpets. The top three import partners are: the UAE, Germany, and France. The commodities mainly imported are: machinery, iron & steel, electric & electronic equipment, and cereals.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods and services (annual % change)	23.3	23.9	13.9	-13.2	13.7
Exports of goods and services (annual % change)	8.3	11.2	-0.8	-13.2	0.8
Imports of goods and services (in % of GDP)	22.7	25.7	25.9	30.2	n.c.
Exports of goods and services (in % of GDP)	26.5	27.2	29.0	38.8	n.c.
Foreign trade (in % of GDP)	49.3	52.9	55.0	69.0	n.c.

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
Japan	23.9%
Italy	10.7%
France	6.9%

Main suppliers (% of imports)	2006
China	6.0%
France	5.4%
India	3.7%
Japan	2.6%

Source: 2006

Main products

Main exports (% of exports)	2006
Mineral fuels, mineral oils	83.3%
Edible fruit and nuts, peel of citrus fruit or melons	2.4%
Iron and steel	1.8%
Plastics	1.3%
Organic chemicals	1.0%

Main imports (% of imports)	2006
Mineral fuels, mineral oils	4.0%
Machinery and mechanical appliances	3.2%
Electrical machinery and equipment	2.2%
Iron and steel	2.0%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: Ministry of Economic Affairs and Finance
Statistical Office
Central Bank
Stock Exchange: http://www.iranbourse.com/Default.aspx?alias=www.iranbourse.com/EN">Teheran Stock Exchange
Online newspapers: Iran Daily
Teheran Daily Times NewsPaper
Iran NewsPaper (en arabe)
Search Engines: Iran Index
Iran Mania
Search Iran
Iran Internet Pages
Economic portals: Pars Times

Political outline

Executive Power: The chief of state is the S upreme Leader who is the leader of the Islamic Revolution appointed for life time by the Assembly of Experts. The Supreme Leader is Commander-in-Chief of the armed forces, controls the military intelligence and security operations, and has sole power to declare war. The head of the government is the President who is elected by popular vote for a four year term. The Council of Ministers (cabinet) is selected by the President with legislative approval. President enjoys the executive powers, except for matters directly related to the Supreme Leader.
Legislative Power: The legislature is unicameral. The parliament consists of Islamic Consultative Assembly having 290 seats with its members elected by popular vote to serve four-year terms. President cannot dissolve the parliament directly but can recommend the same to Supreme Leader who acts on the advice of Council of Guardians (a high power body which functions like a constitutional court) . The people of Iran enjoy very limited political rights.
Main political parties: Political pressure groups conduct most of Iran's political activities. It is quite difficult to get a clear view on Iranian political parties; however the major Political Parties are as follows:
- Islamic Society of Engineers – supports acquiring scientific & technical knowledge by Iran, opposes Western culture & values, supports Islamic values;
- Executives of Construction Party - supporters of ex-President Rafsanjani and his policies;
- Islamic Iran Participation Front – a reformist political party, supports democracy;
- Militant Clergy Association – moderate conservative clerical party.
Current political leaders: Supreme Leader: Ayatollah Ali Hoseini-KHAMENEI (since June 1989) – non-partisan
President: Mahmud AHMADI-NEJAD (since August 2005) – Islamic Society of Engineers
Next election dates: Presidential: Year 2009
Islamic Consultative Assembly: 2012