Revolution at 40: Economy by the Numbers

February 7, 2019

Iran’s economy has faced recurring existential crises since the 1979 revolution. Tehran suffered the biggest shocks from the sapping costs of an eight-year war with Iraq, between 1980 and 1988, and the wave of international sanctions imposed in 2012. During less volatile years, Iran’s economic indicator -- gross domestic product and per capita income -- did increase. But corruption and gross mismanagement undermined growth. The Islamic Republic was consistently burdened by chronic unemployment and inflation. When he took office in 2013, President Hassan Rouhani acknowledged, "The previous government was the wealthiest and most indebted government" since the 1979 revolution.
 

Khamenei
Supreme Leader Ayatollah Ali Khamenei

Iran had expected to reap significant economic benefits as part of the 2015 nuclear deal reached with the world’s six major powers. But the U.S. withdrawal from the agreement and subsequent reimposition of sanctions in 2018 hampered Iran’s ability to conduct business and attract investment. 

On February 6, Parliamentary Speaker Ali Larijani announced that Supreme Leader Ayatollah Ali Khamenei had ordered the government to "reform the country's structure" within four months. "This may lead to reforming the national budget [for the upcoming Iranian year], which will be pursued after work on the budget in the parliament is completed," said Larijani. The following is an overview of key economic indicators. 

 

Growth and Inflation

After the 1980-1988 war with Iraq, Iran’s GDP gradually increased over the next two decades. In 2012, however, international sanctions disrupted the growth trend. 

GDP S-I.jpg

 

GDP capita.jpg

Source: World Bank national accounts data, and OECD National Accounts data files

 

Inflation_0.jpg

Source: International Monetary Fund, International Financial Statistics and data files.

 

Currency Devaluation (rials per U.S. dollar)

Currency S-I.jpg

Credit: Graph by Djavad Salehi-Isfahani
Source: The Central Bank of Iran and http://www.bonbast.com for late 2018 (accessed November 24, 2018).

 

Official Military Expenditure

Military spending.jpg

Source: Stockholm International Peace Research Institute (SIPRI), Yearbook: Armaments, Disarmament and International Security

 

Employment

Unemployment total.jpg

Source: International Labour Organization, ILOSTAT database. Data retrieved in September 2018.

 

Unemployment groups S-I.jpg

Credit: Graph by Djavad Salehi-Isfahani
Source: 2-percent sample of the 2016/2017 national census (Statistical Center of Iran)

 

Female Unemployment.jpg

Source: International Labour Organization, ILOSTAT database. Data retrieved in September 2018.

 

F participation_0.jpg

*Percentage of female population ages 15+

Source: International Labour Organization, ILOSTAT database. Data retrieved in September 2018

 

Oil Exports and Production

Exports.jpg

Source: U.S. Energy Information Administration

 

EIA graph

Source: U.S. Energy Information Administration, Short-Term Energy Outlook, October 2018; ClipperData
Note: Liquid fuels production includes crude oil, lease condensate, hydrocarbon gas liquids, biofuels, and refinery processing gain.

 

The United States withdrew from the nuclear deal in May 2018 and reimposed oil sanctions in November 2018, triggering a decline in production and exports. 

oil ex 111819.jpg

Source: SVB Energy International (data used with permission)

 

Oil Ex 8_1.jpg

Source: SVB Energy International (data used with permission)

 

Petroleum production.jpg

Source: U.S. Energy Information Administration (1980-2017) and SVB Energy International (2018 data used with permission)

 

Oil Prod 18-19.jpg

Source: SVB Energy International (data used with permission)

 

This article is based on research done by Katayoun Kishi, who was a research assistant at the U.S. Institute of Peace in 2016. Garrett Nada, Managing Editor of The Iran Primer, and Maana Azar-Chehr, a research assistant at the Woodrow Wilson International Center for Scholars, also conducted research for this article.