Panorama econòmic

Economic indicators

Iran's economy is characterized by its reliance on hydrocarbon resources, a vibrant agricultural sector, and a diverse service industry, with a significant state involvement in the manufacturing and financial services sectors. External shocks, such as sanctions and commodity price fluctuations, led to a decade-long stagnation that concluded in 2019/20. However, in recent years, Iran's economy has begun to recover, buoyed by a resurgence in services after the pandemic, heightened activity in the oil sector, and adaptive policy measures. Economic resilience has been demonstrated in response to sanctions, including exchange rate adjustments that enhanced the competitiveness of domestically produced goods in international markets. According to the World Bank, in fiscal year 2023/24, GDP growth accelerated to 5%, fuelled by strong performance in the oil sector and services. Oil GDP rose by 14.7%, supported by tighter global markets and higher export volumes aided by price discounts, while the non-oil sector expanded by 3.6%, driven mainly by services. GDP growth is expected to slow in the medium term, with FY 2024/25 growth easing due to tighter fiscal and monetary policies and the fading impact of the oil-driven rebound in FY 2023/24 amid weakening global demand. Non-oil growth will remain limited by ongoing sanctions, energy shortages, and economic uncertainty.

In FY 2023/24, government finances came under pressure as oil revenues fell short of targets as a result of U.S. sanctions. Although tax revenue met expectations, the budget deficit rose by 0.6 percentage points year-on-year to an estimated 3.4% of GDP, further widened by substantial off-budget spending, including cash transfers under the Targeted Subsidies Program. The 2024/25 budget law reflects a more cautious fiscal approach, with restrained spending and conservative revenue forecasts. The general government debt-to-GDP ratio was estimated at 34.6% in 2024, up by 0.6% year-on-year, and is expected to increase marginally in 2025 (34.9% - data IMF). Inflation eased in the first five months of 2024/25, with headline and core inflation falling to 31.6% and 34.7% year-on-year in August—down 23.9 and 12.2 percentage points from April 2023 peaks. The decline was driven by lower global commodity prices, easing inflation expectations, and tighter monetary policy, including bank balance sheet limits, stricter reserve requirements, and higher interbank rates. Inflation is expected to decline further but remain elevated, straining low-income households. Tighter monetary policy may also slow real sector growth, as 90% of firms rely on bank financing (data from World Bank).

The labour market is recovering, but challenges remain as an ageing population and continued human capital flight further constrain economic growth and fiscal stability. Employment growth lowered the unemployment rate to 7.7% in FY 2023/24, but labour force participation remained low at 41.2%, with only 14.3% of working-age women active in the workforce, highlighting the need for more job creation. Moreover, poverty is expected to decline modestly, from 21.9% in 2022/23 to 20% in 2023/24 and 19% in 2024/25. Poor households are predominantly rural, uneducated, and female-headed, and have historically seen limited gains from economic growth. Lastly, the country’s GDP per capita (PPP) was estimated at USD 19,606 in 2024 by the IMF.

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