COUNTRY PROFILE OF IRAN

ECONOMIC TRENDS


The structure and fate of the Iranian economy continues to be determined by its reliance on oil, as it has been for most of the past 40 years. A crude oil producer since the first decade of the century, Iran has passed through periods of boom and bust as oil prices have risen and fallen on the volatile international markets. As the recipient of crude revenue, the state became and remains the dominant economic force. Over-ambitious development plans following the price explosion of 1973 served to concentrate yet more power in the hands of the public sector, while the nationalisation of many large firms in the aftermath of the revolution, and restructuring for the war effort in the 1980s, compounded the process.

Main economic indicators, 2000/01(a)
Real GDP growth (%) 5.0
Consumer price inflation(b) (av; %) 14.5
Current-account balance (US$ bn) 11.6
Average exchange rate(c) (IR:US$) 8,150
Population (m; mid-1999) 62.8
(a) Fiscal year starting March 21st. (b) Average; year ending December 20th.(c) Tehran Stock Exchange (TSE) export rate (end-period). 
Sources: EIU; IMF; Bank Markazi.

The oil sector's share of GDP has declined from 30-40% in the 1970s to 10-20%, mainly as a result of war damage to production facilities (Iranian output still stands below its pre-war highs) and OPEC output ceilings, but oil revenue still provides some 80% of export earnings and around 40-50% of the government budget, ensuring that the hydrocarbons sector receives the lion's share of the state investment budget and that the public sector remains ascendant. The non-oil industrial sector has been undermined by the uncertain implementation of the privatisation process, together with import suppression imposed in the mid-1990s as Iran sought to conserve foreign exchange to meet its high external debt-repayment obligations. The services sector has seen the greatest long-term growth in terms of its share of GDP, but currency-exchange restrictions, excessive bureaucracy and the uncertainty of long-term planning have made this a volatile sector. State investment has boosted agriculture, however, with the liberalisation of production and the improvement of packaging and marketing helping to develop new export markets. Large-scale irrigation schemes, together with the wider production of export-based agricultural items such as dates, flowers and pistachios, has produced the fastest economic growth of any sector in Iran over much of the 1990s, although severe drought in 1999 and 2000 held back output growth substantially. Agriculture remains one of the largest employers in the country, accounting for 22% of all jobs according to the 1991 census.

 
Comparative economic indicators, 2000
Saudi
Iran Arabia Egypt Jordan Israel  
GDP (US$ bn) 64.8 164.9 92.5 7.8 110.4
GDP per head (US$) 1,017 8,059 1,350 1,172 17,656
Consumer price inflation (av; %) 14.5 -0.8 2.7 0.7 1.1
Current-account balance (US$ bn) 11.6 14.8 -0.8 0.1 -1.2
% of GDP 18.0 8.9 -0.9 1.7 -1.1
Exports of goods fob (US$ bn) 29.5 80.1 7.1 1.9 31.7
Imports of goods fob (US$ bn) -16.2 -34.2 -17.6 -4.0 -34.5
External debt (US$ bn) 9.1 35.9 29.5 8.9 37.2
Debt-service ratio, paid (%) 9.7 3.5 10.8 14.9 14.9
Source: EIU, CountryData.

NATIONAL ACCOUNTS

At Current Prices
1378#
1379*
(Figures in parentheses indicate share percent
GDP at Base Price
424,886.6
579,274.5
(100.0)
(100.0)
Sectoral Value-Added
Oil
64,125.2
129,535.4
(15.1)
(22.4)
Non-Oil
360,761.4
449,739.1
(84.9)
(77.6)
Agriculture
60,407.2
74,725.5
(14.2)
(12.9)
Manufacturing & Mining (2)
81,567.1
102,860.0
(19.2)
(17.8)
Industry & Mine
60,501.2
77,880.9
(14.2)
(13.4)
Construction
16,815.0
20,009.9
(4.0)
(3.4)
Services (3)
218,787.1
272,153.6
(51.5)
(47.0)
Gross Domestic Expenditure
426,367.4
582,050.3
(100.0)
(100.0)
Consumption Expenditures
Private
225,100.1
263,936.4
(52.8)
(45.3)
Public
65,412.3
83,795.0
(15.3)
(14.4)
Gross fixed capital formation
Private
Machinery
58,778.6
78,371.5
(13.8)
(13.5)
Construction
22,125.7
29,569.9
(5.2)
(5.1)
Public
Machinery
14,088.5
17,433.9
(3.3)
(3.0)
Construction
26,294.2
32,180.3
(6.2)
(5.5)
Net Export
24,867.8
94,031.6
(5.8)
(16.2)
National Income
330,859.9
460,317.0
Gross National Savings
135,911.3
231,554.0

At Constant 1369 Prices (billion rials)
(Figures in parentheses indicate percentage change over the previous period)
1378#
1379*
GDP at Base Price (2) 
48,914.6
51,816.4
(2.8)
(5.9)
GDP Deflator 
868.6
1,117.9
(30.5)
(28.7)
Sectoral Value - Added
Oil 
3,883.9
4,260.6
(-4.6)
(9.7)
Non-Oil 
45,030.7
47,555.8
(3.5)
(5.6)
Agriculture 
8,091.0
8,395.3
(-5.6)
(3.8)
Manufacturing & Mining (3) 
9,823.4
10,693.6
(9.6)
(8.9)
Industry & Mine 
6,667.4
7,294.3
(8.6)
(9.4)
Construction 
2,410.3
2,620.0
(14.1)
(8.7)
Services (4) 
27,116.3
28,466.9
(4.5)
(5.0)
Gross Domestic Expenditure 
49,084.8
52,064.3
(3.1)
(6.1)
Consumption Expenditure
Private 
29,008.1
30,216.2
(3.5)
(4.2)
Public 
5,766.6
5,827.4
(-0.6)
(1.1)
Gross fixed capital formation
Private
Machinery
5,362.1
5,802.2
 
(4.0)
(8.2)
Construction
3,193.4
3,590.6
 
(6.5)
(12.4)
Public
Machinery 
1,102.2
1,291.7
(2.8)
(17.2)
Construction 
3,081.2
3,123.2
(19.1)
(1.4)
Net Export
2,796.2
4,199.2
Terms of Trade Effect
-601.8
811.3
National Income 
38,559.1
42,432.0
(7.6)
(10.0)
Gross National savings 
14,000.4
16,883.0
(13.8)

National Accounts (1) (billion rials)
1378#
1379*
(At Current Prices)
(Figures in parentheses indicate share percent)
Gross Fixed Capital Formation in Construction by Economic Sectors
Total
48,419.9
61,750.2
(100.0)
(100.0)
Agriculture
3,212.4
4,013.7
(6.7)
(6.5)
Oil & Gas 
4,266.7
5,130.5
(8.8)
(8.3)
Manufacturing & Mining
4,710.0
5,630.5
(9.7)
(9.1)
Services
36,230.8
46,975.6
(74.8)
(76.1)
Gross Fixed Capital Formation in Machineries by Economic Sectors
Total
72,867.1
95,805.4
(100.0)
(100.0)
Agriculture
1,108.5
1,307.2
(1.5)
(1.4)
Oil & Gas
760.3
1,149.0
(1.0)
(1.2)
Manufacturing & Mining 
27,889.9
39,549.1
(38.3)
(41.3)
Services
43,108.4
53,800.1
(59.2)
(56.1)
(At Constant 1369 Prices)
Gross Fixed Capital Formation in Construction by Economic Sectors
Total
6,274.6
6,713.8
(12.3)
(7.0)
Agriculture
419.3
435.9
(24.4)
(4.0)
Oil & Gas
500.0
497.9
(19.5)
(-0.4)
Manufacturing & Mining
553.3
548.2
(15.8)
(-0.9)
Services
4,802.0
5,231.8
(10.3)
(8.9)
Gross Fixed Capital Formation in Machineries by Economic Sectors
Total
6,464.3
7,093.9
(3.8)
(9.7)
Agriculture
81.3
87.5
(8.6)
(7.5)
Oil & Gas
59.4
67.0
(-4.5)
(12.8)
Manufacturing & Mining
2,609.3
2,911.6
(0.5)
(11.6)
Services
3,714.3
4,027.8
(6.3)
(8.4)

(1) Figures for 1338 onwards have been revised and the base year has been changed to 1369.
(2) The terms of trade effect is not included.
(3) Includes "water, electricity and gas" sub-sector.
(4) Less imputed bank service charges.
#   Figures are provisional.
*   Figures are estimated.

GOVERNMENT BUDGET

 
Government Budget and Fiscal Data (billion rials)
 
1379 #(2)
1380
(Approved budge)
Revenues
Total
104,640.8
134,768.9
(13.4)
 
Oil
20,125.0
22,512.0
(-22.5)
 
Foreign exchange sale
39,323.5
46,141.4
(112.2)
 
Tax
32,842.1
45,388.6
(27.1)
 
Other revenues
12,350.2
20,726.9
(-43.9)
 
Expenditure (1)    
Total 
108,316.2
141,154.9
 
(16.3)
 
Current
85,865.4
104,537.9
 
(25.9)
 
Development
22,450.8
36,617
 
(-10.0)
 
1380
 
Q1
Q2
Revenues
Total
28,034.2
32,024.3
(-9.6)
(14.2)
Oil
8,708.5
6,483.5
l
(-25.6)
Foreign excgachange sale
9,621.5
11,278.5
(-47.5)
(17.2)
Tax
7,700.4
10,876.2
(-4.9)
(41.2)
Other revenues
2,003.7
3,386.2
(-56.1)
(69.0)
Expenditure (1)
Total
26,209.1
33,480.7
(-24.3)
(27.7)
Current
21,230.0
25,890.0
(-25.7)
(22.0)
Development
3,724.1
8,082.5
(-41.7)
(117.0)
1380
 
Tir
Mordad
Shahrivar
Revenues
Total
13,685.2
9,481.0
8,858.1
(25.1)
(-30.7)
(-6.6)
Oil
2,731.5
1,876.0
1,876.0
(-9.7)
(-31.3)
(0)
Foreign exchange sale
4,878.5
3,500.0
2,900.0
(3.3)
(-28.3)
(-17.1)
Tax
4,780.0
2,907.7
3,188.5
(85.2)
(-39.2)
(9.7)
Other revenues
1,295.3
1,197.3
893.6
(113.2)
(-7.6)
(-25.4)
Expenditure (1)   
Total 
10,660.3
12,955.0
9,865.3
(7.8)
(21.5)
(-23.7)
Current 
8,187.1
10,254.4
7,448.5
(15.3)
(25.3)
(-27.4)
Development
2,897.4
2,983.4
2,201.8
(29.3)
(3.0)
(-26.2)

  • Discrepancy between the sum of current and development expenditure and the total is due to the  payment of provincial revolving fund for which breakdown into current and development is not available.
  • Figure for foreign exchange sale includes transfers from paragraph B of Note 29 of 1379 budget by Rls. 1,823.8 billion.
  • # Figures are provisional.
  • l  More than 500 percent increase.
Government Budget and Fiscal Data (1) (billion rials)
Sources for Deficit Finance or Surplus Uses (2)
  Budget Deficit/
Surplus		 Borrowing from Banking System Returns,
Prepayments and Other Accounts		 Participation Papers Others Surplus (-) or drawdown (+) in foreign exchange obligations account
1380 (Approved budget) -6,386.0 0 1,245.0 2,400.0 2,741.0 ..
1380:
Q1 1,825.1 0 279.8 0.8 -2,105.7 -313.1
Q2 -1,456.4 0 175.3 90.9 1,190.2 1,241.0
1380:
Tir 3,024.8 0 26.8 0 -3,051.7 -151.7
Mordad -3,474 0 95.2 0 3,378.8 746.6
Shahrivar -1,007.3 0 53.3 90.9 863.0 646.1
(1) Discrepancies are due to rounding.
(2) According to the classification of Central Bank, sources for deficit finance include revenues received from sale of participation papers, receipts from foreign facilities, and Islamic Development Bank facilities, returns and prepayments of the previous year, treasury revolving fund, principal of government loans abroad, principal and interest of public corporations and institutions loans, borrowing from banking system, sale of government shares, oil prefinance , advances from part of Hadj expenses, and balance of account no 8001.
(3) .. Figures not available
(4) # Figures are provisional

Government Budget and Fiscal Data (1)
(billion rials)
(Figures in parentheses indicate percentage change over the previous year)


1379#
1380 
(Approved budget)
Tax Revenues
Direct Taxes
Total
19,584.6
28,214.1
(18.1)
Corporate Tax
11,295.5
15,766.3
(12.4)
Income Tax
6,834.0
9,650.0
(27.0)
Wealth Tax
1,455.1
2,797.8
(26.3)
Indirect Taxes
Total
13,257.5
17,174.5
(43.4)
Import Tax
7,947.7
11,275.5
(36.9)
Sales Tax
5,309.8
5,899.0
(54.3)
1380 
 
Q1
Q2
Tax Revenues
Direct Taxes
Total
5,047.7
6,962.3
(9.7)
(37.9)
Corporate Tax
2,444.8
4,258.4
(-4.8)
(74.2)
Income Tax
2,187.5
2,197.9
(35.6)
(0.5)
Wealth Tax
415.4
506.0
(-1.0)
(21.8)
Indirect Taxes
Total
2,652.7
3,913.9
(-24.1)
(47.5)
Import Tax
1,914.5
2,858.2
(-19.9)
(49.3)
Sales Tax
738.2
1,055.7
(-33.2)
(43.0)
1380 
Tir
Mordad
Shahrivar
Tax Revenues
Direct Taxes
Total
3,093.9
1,883.8
1,984.6
(77.9)
(-39.1)
(5.3)
Corporate Tax
2,134.4
1,007.9
1,116.1
(141.8)
(-52.8)
(10.7)
Income Tax
784.9
709.2
703.8
(6.9)
(-9.6)
(-0.8)
Wealth Tax
174.6
166.7
164.7
(42.4)
(-4.5)
(-1.2)
Indirect Taxes
Total
1,686.1
1,023.9
1,203.9
(100.4)
(-39.3)
(17.6)
Import Tax
1,320.5
709.3
828.4
(137.8)
(-46.3)
(16.8)
Sales Tax
365.6
314.6
375.5
(27.9)
(-13.9)
(19.4)
(1) Discrepancies are due to rounding.
#   Figures are provisional.

Calendar
 
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