| Date - Field | Iran - Economy - overview |
2009 January
Economy - overview | Iran's economy is marked by an inefficient state sector, reliance on the oil 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 proposed reforms to Iran's system of of price controls and subsidies, particularly on food and energy, but the government's attempt to impose a Value-Added Tax (VAT) was abandoned after widespread protests. 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. The recent drop in oil prices will be the most significant impact of the global financial crisis on Iran, but high oil prices in recent years have enabled Iran to amass nearly $70 billion in foreign exchange reserves. Iranians continue to suffer from double-digit unemployment and inflation - inflation climbed to 26% as of 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 Iranians to seek employment overseas, resulting in significant "brain drain." |
2008 January
Economy - overview | Iran's economy is marked by an inefficient state sector, 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. High oil prices in recent years have enabled Iran to amass nearly $65 billion in foreign exchange reserves, but have not eased economic hardships such as high unemployment and inflation. |
2007 January
Economy - overview | 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 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. |
2006 January
Economy - overview | 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 $30 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. |
2005 January
Economy - overview | 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 $30 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. |
2004 January
Economy - overview | 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 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 city of Bam in southeastern Iran, killing more than 30,000 people. |
2003 January
Economy - overview | 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. Relatively high oil prices in recent years have enabled Iran to amass some $15 billion in foreign exchange reserves, but have not solved Iran's structural economic problems, including high unemployment and inflation. |
2002 January
Economy - overview | 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 rise in oil prices in 1999-2000 afforded Iran fiscal breathing room but does not solve Iran's structural economic problems, including the encouragement of foreign investment. |
2001 January
Economy - overview | 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 1999-2000 afforded Iran fiscal breathing room but does not solve Iran's structural economic problems, including the encouragement of foreign investment. |
2000 January
Economy - overview | 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 afforded Iran fiscal breathing room but does not solve Iran's structural economic problems. |
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This page was last updated on 7 July, 2009 |
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