Economy - overview:
Iran's economy is marked by an inefficient state sector, reliance on the oil sector, which provides the majority of government revenues, and statist policies, which create major distortions throughout the system. Most economic activity is controlled by the state. Private sector activity is typically limited to small-scale workshops, farming, and services. Price controls, subsidies, and other rigidities weigh down the economy, undermining the potential for private-sector-led growth. Significant informal market activity flourishes. Corruption and shortages of goods are widespread. President Mahmud AHMADI-NEJAD has proposed reforms to Iran's system of price controls and subsidies, particularly on food and energy. However, previous government-led efforts at reform - such as fuel rationing in July 2007 and the imposition of the Value-Added Tax (VAT) in October 2008 - were met with stiff resistance and violent protests. High oil prices in recent years allowed Iran to greatly increase its export earnings and amass nearly $100 billion in foreign exchange reserves. But with oil prices currently below $40 per barrel, the Iranian government is facing difficulties. Tehran has formulated a 2009 budget that anticipates lower oil prices. The government has drawn down the country's Oil Stabilization Fund, and may be dipping into foreign exchange reserves. Iran continues to suffer from double-digit unemployment and inflation - inflation climbed to a 28% annual rate in 2008. Underemployment among Iran's educated youth has convinced many to seek jobs overseas, resulting in a significant "brain drain."
GDP (purchasing power parity):
$843.7 billion (2008 est.) country comparison to the world: 18 $792.2 billion (2007 est.)
$734.7 billion (2006 est.)
note: data are in 2008 US dollars
GDP (official exchange rate):
$335.2 billion (2008 est.)
GDP - real growth rate:
6.5% (2008 est.) country comparison to the world: 47 7.8% (2007 est.)