Economy & Business

Overview

Among 193 countries, the IMF introduced Iran as the world 18th largest economy, in terms of GDP volume in 2017. According to this Institute, Iran GDP, reached 1,630 bn USD, based on the purchasing power index (PPP) in 2017. The year 2017 was a dreamy time for the Iranian economy in terms of statistics, following a long period two-digit growth and a one-digit inflation.

However, this rapid growth did not affect the Iranian economy, due to the sanctions lifting in oil and gas industry and increased production and exports. Economic growth reached 12.5% in 2017, driven by the growth of the oil sector, accounting for 9.8%, with the highest growth among the various sectors. Table. Main Macroeconomic Indies: 2017

On the other hand, the successful reduction of the inflation rate can be resulted by the major achievement of economic policymakers in 2017, with Iran gaining one-digit inflation rate for nearly three decades. The inflation rate reached about 9% in 2017. This is Iran’s second experience to reduce inflation below 10% after the year ended March 1990.

Over the past two years, there has been more FDI tendency by foreign countries, including China and European countries with 12,200 mn USD, in 2016. Germany, China and Turkey have been leading in FDI. After Egypt, Iran has gained the 2nd place in the Middle East and North Africa, based on the value of attracted foreign capital and grabbed the 6th place in terms of the number of projects invested. However, the global "Foreign Direct Investment" has experienced a downward trend in the year 2016.

Important industries

Oil and Gas

Being the world 1st rank in oil and gas reserves, Iran plays a decisive role in global energy security as well as in Asian convergence. Oil is Iran's most important industry, as owning crude oil proven reserve about 158.4 bn barrels, for 9.3% of the world's total reserves. Iran also has 33,500 BCM of natural gas, which is 18% of the world's reserves.

Automotive

After oil and gas, automotive is the second and most important industry and known as the world's 18th and 13th in automotive manufacturing and sales, respectively. More than 800,000 people are active in the industry. With a manufacturing capacity of 2 mn vehicles and 1,350,000 cars produced in 2017.

Mining

Iran is among the world's top 10 countries and the first Middle Eastern country to account for about 7% of the world's mineral resources. Iran also has a world high ranking in uranium, coal and iron ore reserves. According to studies, Iran is located on the belt of iron, zinc, lead, magnesium, copper and gold, with at least 100 years of minerals for production and extraction.

Despite all rich mineral resources and the potential for economic growth through mines, the country has not yet been able to exploit its mineral resources properly, since having small share of mineral exports in GDP. Thus, Iran is extracting 340 mn tons of mineral resources annually from less than 0.6% of its reserves, while the standard for harvesting of mineral resources in the world is 1% of the total volume of reserves per year.

Petrochemical

Due to the rich oil and gas reserves, Iran petrochemical industry is considered as a forerunner sector and has grown dramatically in the past two decades, although has not yet reached its ideal status. The total production of petrochemical complexes amounted to 50.6 mn tons in 2017.

The industry plays a leading role in non-oil exports, economic prosperity, sustainable development, technology localization, downstream industries, employment, and so on. Given the world limited hydrocarbon reserves, maximized use of fossil fuels and added value, the petrochemical industry is now becoming one of the most strategic industries in the world.

Agribusiness

Iran is the only Asian country in the northern hemisphere has four seasons, thus led to the best agricultural and livestock production and potential to export fresh and processed livestock and horticultural products.

Given the infrastructure of land and air transit installation, investors can easily export products and, consequently, receive investment profits in currency. There are 20 types of horticultural products which placed Iran between the world 7th and 8th rankings. According to FAO, in addition to domestic food supply, Iran has the potential to provide Persian Gulf countries.

Transportation

Due to geographical location, Iran is among the countries that enjoy good transit advantages. The Persian Gulf as energy bottleneck, is surrounded by the world's largest oil producers and considering the Caspian Sea in the north, as the best bridge between Iran, Russia, Kazakhstan, Turkmenistan and Azerbaijan, as well as Iraq, Turkey, Pakistan and Afghanistan on the West and the East, Iran can play an important role. In other words, connected with the 15 countries, Iran can play as a link between these countries, and benefit these countries with large population and high revenues, since their beneficial effect on transit and trade development in the region. This also leads to Central Asian countries trade relations with East Asia and European countries through Iran.

Handmade Carpet

Being the world’s largest producer and exporter of hand-woven carpets, Iran produces 3/4 of total global export. About 3 mn sq m of carpets are woven in Iran every year, 65% of which is exported to about 80 countries . Table. Main products: 2017