The petroleum, agricultural, and service sectors, as well as a noticeable state presence in manufacturing and financial services, define Iran’s economy. Iran has the world’s second-largest natural gas reserves and the fourth-largest proven crude oil reserves, and while its economy is rather diversified for an oil exporting country, its economic activity and government revenues are still reliant on oil earnings, making it volatile.
For their 20-year economic vision and five-year growth plan for 2016/17 to 2021/22, the Iranian authorities have embraced a comprehensive policy of market-based reforms. The strategy is built on three pillars: the creation of a robust economy, scientific and technological advancements, and the promotion of cultural excellence. Reform of state-owned firms, the financial and banking sectors, and the allocation and administration of oil income are among its top priorities. The plan predicts an annual economic growth rate of 8%.
Iran is dealing with the consequences of the COVID-19 problem. It remains the worst-affected country in the Middle East and North Africa region, with over 1.7 million illnesses and 61,000 deaths as of mid-March 2021. The number of new, confirmed cases remained steady when additional lockdown measures were implemented in late 2020, and the number of deaths decreased below 100 per day. A progressive easing of lockdown measures, on the other hand, raises the possibility of a fourth wave of COVID-19 cases. Frontline medical professionals began receiving vaccinations in February 2021, but full coverage of Iran’s 84 million inhabitants would take awhile.
For the Iranian calendar year 2020/21, the Gross Domestic Product (GDP) has been estimated at US$628 billion, based on the official exchange rate and a population of around 84 million people. In 2020/21, Iran’s real GDP is expected to expand by 1.7 percent. COVID-19 caused less output loss in Iran than in other countries because the country’s economy had already shrunk by 12% in the previous two years. Both the oil and non-oil sectors recovered faster than predicted in Q3 and Q4-2020, with manufacturing driving the non-oil sector’s revival as exchange rate depreciation made domestic production more competitive.
The COVID-19 pandemic, on the other hand, has had a significant impact on jobs and income in a variety of labor-intensive industries, including high-contact services and the informal sector. Despite the fact that employment levels fell by almost 1 million YoY as a result of the pandemic, discouragement in the labor market, represented in decreased economic participation41.4 percent in Q4-2020dragged the unemployment rate down to 9.4 percent.
COVID-
Iran’s fiscal deficit-to-GDP ratio has risen to its highest level in decades as a result of rising spending and falling oil earnings. From April to December 2020 (9M-2020/21) government revenues were just 55% of the budgeted budget for the entire year. Due to reduced oil export volumes and prices, only 14 percent of expected oil revenue realized. Meanwhile, the pandemic’s higher health and social support costs pushed total spending up by 28% year over year. As a result, the country’s fiscal deficit is expected to rise to over 6% of GDP in 2020/21, with public debt exceeding 50%.
Inflationary pressures grew in 2020/21 as the Iranian rial devalued due to a lack of foreign money and rising economic uncertainty. In February 2021, inflation spiked to nearly 48 percent year over year. Because of US sanctions on accessing foreign reserves, the currency has lost half of its value since April 2020. The rial has regained around 15% of its value as a result of hopes that sanctions will be lifted after the November US elections. The stock market was negatively impacted by exchange rate volatility and government funding operations.
Recent economic trends have added stress to low-income households and slowed the decrease of poverty. From 2017/18 to 2018/19, poverty climbed by one percentage point, reaching 14% before the epidemic. The loss of household income owing to the pandemic, combined with the rising cost of living due to inflation, is expected to push poverty up by 20 percentage points. In response, a variety of social safety measures have been implemented, but while they partially compensate for lost revenues, their real value will diminish as long as inflation remains high.
Iran’s economic prospects are dependent on how the COVID-19 outbreak develops and how quickly the world economy recovers. Due to sluggish vaccination deployment and weak demand from regional trading partners, the country’s GDP is expected to recover gradually. Inflation is expected to fall, although it is still expected to remain above 20% on average in the medium term. Economic pressure on disadvantaged households will persist due to a lack of fiscal space and excessive inflation. Cash transfers that are better targeted can help lower mitigation costs.
The fiscal deficit is expected to remain large in the medium term if oil revenues do not improve. Modest economic recovery would imply slow increase in non-oil revenues as well. Increased reliance on bond issuance, particularly short-term bonds, would result in higher interest and amortization costs. More government debt issuance and asset sales could raise financial contagion risks in the stock market and put more strain on the undercapitalized banking sector.
What will Iran’s GDP be in 2021?
According to Trading Economics global macro models and analysts, Iran’s GDP is anticipated to reach 250.00 USD billion by the end of 2021. According to our econometric models, Iran’s GDP will trend around 270.00 USD billion in 2022 and 300.00 USD billion in 2023 in the long run.
Is Iran the wealthiest nation?
Iran is without a doubt one of the world’s wealthiest countries. With its vast oil, gas, and other natural resources, as well as its young population and access to open seas (via the Persian Gulf), one would expect the country to have considerable growth and have no poverty or unemployment issues.
PILLAR RANKINGS
Iran is the best in terms of health and living conditions, but the worst in terms of education.
Personal liberty. In comparison to a decade earlier, the most significant improvement was in Social Capital.
What is Iran’s military rank?
Iran is ranked 14th out of 142 nations assessed for the annual GFP assessment in 2022. It has a PwrIndx* score of 0.2104 (a 0.0000 score is regarded “perfect”).
What is the poverty rate in Iran?
In 2018, the poverty rate in Iran was 0.5 percent, up from 0.4 percent the previous year. What is the current poverty rate? The fraction of the population living on less than $1.90 per day at 2011 international prices is known as the population below $1.90 per day.
How much of Iran’s GDP is derived by oil?
Iran’s revenue minus oil production costs, expressed as a percentage of GDP, from 1970 to 2018: We have data for Iran from 1970 to 2018 for this indicator. During that time, Iran’s average rate was 21.29 percent, with a low of 3.94 percent in 1986 and a high of 49.32 percent in 1974.
Is Iraq a wealthy country?
Iraq is one of the world’s most oil-rich countries. At the end of 2017, the country had the fifth biggest proved crude oil reserves, with 147.22 billion barrels.
What is the foundation of Iran’s economy?
Iran’s economy is mostly based on oil and gas exports (it possesses roughly 10% of the world’s oil reserves), but it also has major agricultural, industrial, and service sectors.
What does Iran stand for?
“A guest is a gift from God,” as the proverb goes, and this phrase holds a special place in Iranian society. Iranians are willing to provide the best of what they have, whether it is to a foreigner or a fellow countryman. This centuries-old practice has grown in popularity in recent years as more tourists visit to quench their thirst for knowledge about this lesser-known region and, no doubt, to carry home a lasting impression of Iranian hospitality.