The economy of Iran is a mixed and transition economy with a large public sector. Some 60 percent of the economy iscentrally planned. It is dominated by oil and gas production, although over 40 industries are directly involved in theTehran Stock Exchange, one of the best performing exchanges in the world over the past decade. With 10 percent of the world's proven oil reserves and 15 percent of its gas reserves, Iran is considered an "energy superpower".
It is the world's eighteenth largest by purchasing power parity (PPP) and twenty-nine by nominal gross domestic product. The country is a member of Next Eleven because of its high development potential. A unique feature of Iran's economy is the presence of large religious foundations called Bonyad, whose combined budgets represent more than 30 percent of central government spending.
Price controls and subsidies, particularly on food and energy, burden the economy. Contraband, administrative controls, widespread corruption, and other restrictive factors undermine private sector-led growth. The legislature in late 2009 passed the subsidy reform plan. This is the most extensive economic reform since the government implementedgasoline rationing in 2007.
Most of the country's exports are oil and gas, accounting for a majority of government revenue in 2010. Oil export revenues enabled Iran to amass well over $100 billion in foreign exchange reserves as of 2010. Iran ranked first inscientific growth in the world in 2011 and has one of the fastest development in telecommunication globally.
Due to its relative isolation from global financial markets, Iran was initially able to avoid recession in the aftermath of the 2008 global financial crisis. Yet, following increasingly stringent sanctions imposed by the international community as a result of the country's nuclear program, oil exports fell by half. In September 2012, the Iranian rial fell to a record low of 23,900 to the US dollar
Exports aided self-sufficiency and domestic investment, although double-digit unemployment and inflation remain problematic. Iran's educated population, high human development, constrained economy and insufficient foreign and domestic investment prompted an increasing number of Iranians to seek overseas employment, resulting in a significant "brain drain"
Expansion of public healthcare and international relations are the other main objectives of the fifth plan, an ambitious series of measures that include subsidy reform, banking,currency, taxation, customs, construction, employment, nationwide goods and services distribution, social justice and productivity.The intent is to make the country self-sufficient by 2015 and replace the payment of $100 billion in subsidies annually with targeted social assistance. These reforms target the country's major sources of inefficiency and price distortion and are likely to lead to major restructuring of almost all economic sectors. As such, by removing energy subsidies, Iran intends to make its industries more efficient and competitive. By 2016, one third of Iran’s economic growth is expected to originate from productivity improvement. Energy subsidies left the country one of the world's least energy-efficient, with energy intensity three times the global average and 2.5 times higher than the Middle Eastern average. The banking sector is seen as a potential hedge against the removal of subsidies, as the plan is not expected to directly impact banks.Iranian President Hassan Rouhani stated in 2014 that the country has the potential to become one of the ten largest economies within the next 30 years.
|Item||2010 (achieved)||2010–15 (target)|
|GDP world ranking||18th largest economy by PPP||12th in 2015; Goldman Sachs estimate: 12th by 2025|
|Annual growth rate||2.6%||8% on average (based on $1.1 trillion domestic and FDI); forecast: 3.6% on average (2009–14)|
|Unemployment||11.8% according to government; unofficially: 12–22%; 30% according to opposition||7% by 2015, by creating 1 million new jobs each year|
|Inflation rate||15% (as of January 2010)||12% on average|
|Value Added Tax||3%||8%|
|Privatization||N/A||20% of state-owned firms to be privatized each year|
|Share of cooperative sector (% GDP)||< 5%||25%|
|R&D (% GDP)||0.87%||2.5%|
|Share of non-oil exports||20%||30% ($83 billion) by 2016|
|Oil price & revenues in budget||$60 per barrel||$65 per barrel on average / $250 billion in oil and gas revenues. in 2015 once the current projects come on stream; International Monetary Fund projections: ~$60 billion only|
|National Development Fund||N/A||30% of oil revenues to be allocated to the National Development Fund by 2015|
|Oil production||4.1 million bpd||5.2 million bpd (with some 2,500 oil and gas wells to be drilled and commissioned)|
|Natural gas production||N/A||900 million cubic meter/day|
|R&D projects in oil industry||N/A||Implementation of 380 research projects by 2015 covering the enhancement of the recovery rate, gas conversion and hydro conversion|
|Investment in oil and gas industry||N/A||$20 billion a year in private and foreign investment, in part to boost oil refining capacity|
|Petrochemical output||~50 million tpy||100 million tpy|
|Bunkering||25% market share in Persian Gulf||50% market share or 7.5 million tpy of liquid fuel|
|Oil products storage capacity||11.5 billion liters||16.7 billion liters|
|Natural gas storage capacity||N/A||14 billion cubic meters|
|Electricity generation capacity||61,000 MW||86,000 MW|
|Efficiency of power plants||38%||45%|
|Investment in mining and industry||N/A||$70 billion/700,000 billion|
|Crude steel production||~10 million tpy||42 million tpy by 2015|
|Iron ore production||~27 million tpy||66 million tpy by 2015|
|Cement||~71 million tpy||110 million tpy|
|Limestone||N/A||166 million tpy|
|Industrial parks||N/A||50 new industrial parks to be built by 2015|
|Ports capacity||150 million tons||200 million tons|
|Railways||10,000 kilometers||15,000 kilometers by 2015 at a cost of $8 billion per annum|
|Transit||7 million tons||40 million tons of goods|
|Electronic trade||N/A||20% of domestic trade, 30% of foreign trade and 80% of government transactions to be made electronically|