Iran's Economy, By the Numbers

May 11, 2015

Increasingly strict U.S. and E.U. sanctions during the last decade, coupled with corruption and mismanagement under President Mahmoud Ahmadinejad (2005-2013), took a toll on Iran’s economy. But President Hassan Rouhani made significant headway in stabilizing the economy after he took office in 2013.

The economy grew by three percent in 2014, after contracting in 2012 and 2013. Inflation had dropped from nearly 40 percent to 15.6 percent by early 2015. Nuclear diplomacy offered a slight reprieve too. The interim deal—implemented in January and extended twice in July and November—suspended some sanctions and allowed repatriation of oil revenues frozen in banks abroad. Between January and November 2014, Iran gained access to $7 billion in frozen assets.
 
But the Islamic Republic still faced daunting challenges. General unemployment was above 10 percent and youth unemployment was more than double the national average, reaching nearly 27 percent. Some seven million Iranians, about eight percent of the population, were also living in extreme poverty. Plummeting oil prices were Iran’s biggest challenge. In December, President Hassan Rouhani was forced to present a budget for 2015 based on an average oil price of only $70 per barrel, reduced from $100 per barrel in the 2014 budget. The projected price was slashed again to $40 per barrel in January.
 
The following is a rundown of the most recent economic data available on Iran.
 
Gross Domestic Product (GDP) 
 
  • Iran’s GDP was $406.3 billion in 2014. The Islamic Republic has the second largest economy in the Middle East, behind Saudi Arabia.
  • The World Bank classifies Iran as an “upper middle-income” country.
  • Iran’s GDP was ranked 32nd worldwide as of 2013.
Source: The World Bank, 2013-2014
 
Growth
 
  • The Iranian economy grew three percent in 2014, after shrinking 6.6 percent in 2012 and 1.9 percent in 2013.

 
Trade
 
  • In 2014, Iran imported $63.8 billion of goods and exported $94.2 billion of goods, according to the Central Bank of Iran.
  • U.S. exports to Iran totaled $182.1 million in 2014, according to the U.S. Census Bureau.
  • Iran’s non-oil exports rose 24.2 percent in the first ten months of the last Iranian calendar year (March 21, 2014-January 20, 2015) compared to the same period the previous year, according to the World Bank.

 
*This data represents the 4th quarter of Iranian year 1392 (January-March 2014), and the first three quarters of 1393 (March-December 2014). Oil imports include the value of oil products, natural gas, natural gas condensate and liquids imported by National Iranian Oil Company (NIOC), National Iranian Gas Company (NIGC), National Iranian Oil Refining and Distribution Company (NIORDC), and others. Oil exports include the value of crude oil, oil products, natural gas, natural gas condensate and liquids exported by NIOC, NIGC, NIORDC, petrochemical companies, and others.

Sanctions Impact
 
  • GDP: Iran’s GDP shrank by nine percent between March 2012 and March 2014. It is 15-20 percent smaller than it would have been without the latest round of sanctions, if it had stayed on its pre-2012 growth trajectory.
  • Oil: U.S. and E.U. sanctions have cost Iran more than $160 billion in oil revenues since 2012.
  • Hard Currency Reserves: Iran holds around $130 billion in hard currency reserves in accounts abroad, but around $100 billion of that amount cannot be repatriated because of sanctions.
  • Currency Value: The value of the rial declined by 56 percent between January 2012 and January 2014.
  • Inflation: The decline in currency value caused inflation to increase between 2011 and 2013, reaching around 40 percent.
  • Industrial Production: Automobile production fell by around 40 percent between 2011 and 2013.
 
Inflation

  • The inflation rate dropped to 15.6 percent by March 2015, down from around 40 percent two years ago, according to the Central Bank of Iran. 

 

Source: World Bank, 2014
 
Unemployment
 
  • As of December 2014, 10.5 percent of Iranians were unemployed, and 9.5 percent were underemployed. Only 37.3 percent of the population was economically active (either employed or unemployed and looking for work).
  • Unemployment rates by province ranged from 5.5 percent in Markazi to 14.9 percent in Lorestan

 

Group
Unemployment rate
Youth, aged 15-24
25.7 percent
Men
8.7 percent
Women
20.3 percent
Residents of urban areas
11.7 percent
Residents of rural areas
7.4 percent

 

 
Income and Employment
 
  • Per capita income (PPP) was $15,610 in 2013, according to the World Bank
  • Of those employed, 16.8 percent worked in agriculture, 34.4 percent worked in manufacturing, and 48.8 percent worked in services in 2014.

 
Oil & Gas
 
  • Iran holds the world’s fourth largest oil reserves, with 157 billion barrels of crude oil. It also holds the world’s second largest natural gas reserves, behind Russia, with 1,193 trillion cubic feet of natural gas. It is home to the South Pars field, the largest natural gas field in the world.
  • Iran produced around 2.8 million barrels of oil per day in March 2015. Oil production averaged 3.379 million barrels per day throughout 2014.
  • Iran exported around 1.1 million barrels per day in March 2015, down from 2.2 million at the beginning of 2012.
  • China, India, Japan, Korea, and Turkey are the top importers of Iranian liquid fuels.
  • Managing Director of the National Iranian Gas Company Hamid-Reza Araqi said that Iran exported eight percent more natural gas in the last year compared to the year before, an increase of one billion cubic meters.
 
Source: Energy Information Administration
 
State Budget

 

  • President Rouhani presented his budget of some 8,400 trillion rials, or about $312 billion at the official exchange rate, in December 2014. It was based on an average oil price of about $70, down $30 compared to last year. The budget also included a 33 percent hike in defense spending.
  • Rouhani said oil revenues earmarked for the budget would be $24 billion next year, down from $27.5 billion, meaning less than half the government's income would come from exported crude.
  • Total government spending in Rouhani’s budget increased 8.5 percent from the previous year.
 
Business Environment
 
  • In October 2014, Iran ranked 130th out of 189 countries in the World Bank’s Doing Business Report, which measures regulations affecting 11 areas of the life of a business.
 
Poverty
 
  • Seven million people are living in extreme poverty, according to the Minister of Labor, Cooperatives and Social Welfare Ali Rabiei, in October 2014