Iran Economic Outlook
A heavily sanctioned, oil-reliant economy:
Iran’s economy is largely dependent on oil and gas exports, which account for a major share of government revenue. However, U.S. sanctions, particularly since 2018, have severely impacted Iran’s ability to trade internationally, limiting foreign investment and access to global financial markets. The country has sought to circumvent these restrictions through barter trade, reliance on regional allies, and strengthening ties with China and Russia.
Inflation and currency instability:Economic conditions in Iran have frequently been challenging amid high inflation and a volatile rial. Economic mismanagement, combined with external pressures, has led to periods of hyperinflation and sharp currency devaluation in the parallel market. These issues have significantly eroded the purchasing power of ordinary citizens, leading to widespread dissatisfaction and periodic protests.
Economic diversification efforts:The Iranian government has attempted to diversify the economy beyond oil by promoting domestic manufacturing, agriculture, and a growing technology sector. However, state intervention, regulatory inefficiencies, and corruption have hindered private sector growth. Additionally, Iran has strong potential in the mining sector, with vast reserves of copper, iron ore, and rare minerals, though foreign investment remains constrained by sanctions.
Iran’s economic outlook:Iran’s economic future is closely tied to geopolitical developments, particularly the potential easing or tightening of foreign sanctions through diplomatic negotiations. While Iran has found alternative trading routes and partners, long-term growth will depend on structural reforms, improved business conditions, and the ability to attract foreign capital. Without substantial changes, economic stagnation and inflation are likely to persist.
Iran's Macroeconomic Analysis:
Nominal GDP of USD 434 billion in 2024.
Nominal GDP of USD 373 billion in 2023.
Nominal GDP of USD 401 billion in 2024.
GDP per capita of USD 4,633 compared to the global average of USD 10,589.
GDP per capita of USD 4,347 compared to the global average of USD 10,589.
GDP per capita of USD 5,013 compared to the global average of USD 10,589.
Average real GDP growth of 2.8% over the last decade.
Average real GDP growth of 2.3% over the last decade.
Average real GDP growth of 2.8% over the last decade.
Sector Analysis
In 2022, services accounted for 42.7% of overall GDP, manufacturing 20.0%, other industrial activity 24.3%, and agriculture 13.0%. Looking at GDP by expenditure, private consumption accounted for 47.2% of GDP in 2023, government consumption 13.2%, fixed investment 36.4%, and net exports 3.2%.International trade
In 2021, manufactured products made up 37.5% of total merchandise exports, mineral fuels 47.9%, food 7.7%, ores and metals 6.5% and agricultural raw materials 0.4%, with other categories accounting for 0.0% of the total. In the same period, manufactured products made up 59.5% of total merchandise imports, mineral fuels 1.5%, food 30.9%, ores and metals 1.8% and agricultural raw materials 2.7%, with other goods accounting for 3.6% of the total. Total exports were worth USD 100.50 billion in 2023, while total imports were USD 79.40 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 2.3% in the decade to 2023. To read more about GDP growth in Iran, go to our dedicated page.
Fiscal policy
Iran's fiscal deficit averaged 2.2% of GDP in the decade to 2022. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 10.5% in the decade to 2023. For more information on Iran's unemployment click here.
Inflation
Inflation averaged 26.8% in the decade to 2024. Go to our Iran inflation page for extra insight.
Monetary Policy
Iran's monetary policy rate ended 2024 at 24.00%, up from 22.00% a decade earlier. See our Iran monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the rial weakened by 35.5% vs the U.S. dollar. For more info on the rial, click here.
Economic situation in Iran
IMF projections put GDP growth at 3.5% for the Iranian year ending in March 2025 (SH 2024). A strong increase in oil production drove the reading, thanks to elevated Chinese purchases, the loose enforcement of U.S. oil sanctions, and Iran’s exemption from OPEC+ output cuts. However, the economy will be losing steam so far this Iranian year, as oil output growth has slumped to the low single digits in recent months from the double-digit readings recorded for much of SH 2024. Moreover, the non-oil economy likely remains hampered by one of the Middle East’s highest inflation rates, energy shortages, foreign sanctions and corruption. In other news, the U.S. and Iran recently held high-level discussions on reining in Iran’s nuclear program in exchange for sanctions relief. If a deal is eventually reached along these lines, it could notably boost economic activity.Iran Economic Forecasts
Projections out to 2034.36 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 9 expert analysts.
Want to get insight on the economic outlook for Iran in the coming years? FocusEconomics collects projections out to 2034 on 36 economic indicators for Iran from a panel of 9 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Iran economy. To download a sample report on the Iran's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.