What is Iran’s Economy Like? invstr Meets Basim Al-Ahmadi, Middle East Consultant – SET Advisory
What is Iran’s economy like?
Lea Jakobiak, invstr Reporter spoke to Basim Al-Ahmadi, Middle East Consultant at SET Advisory to get a clearer picture, and whether President Donald Trump will follow through on his campaign promises to get tough on Iran.
From Wikipedia’s entry – ‘Economy of Iran’
The economy of Iran is a mixed and transition economy with a large public sector. Some 60 percent of the economy is centrally planned. It is dominated by oil and gas production, although over 40 industries are directly involved in the Tehran 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-seventh 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 implemented gasoline 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 $135 billion in foreign exchange reserves as of Dec 2016. Iran ranked first in scientific growth in the world in 2011 and has one of the fastest rates of 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. However, following expansion of international sanctions related to Iran’s nuclear program, the Iranian rial fell to a record low of 23,900 to the US dollar in September 2012.
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