Economy of Iran

Main article: Iran

GDP

2023 World's fifteenth largest PPP GDP

2022

Iran's share of global PPP GDP remains at 1%

Main article: World Economy

GDP estimate - $2 trillion

GDP size forecast - $1.7 trillion

2021: GDP size - $1.08 trillion

2020: Decline in GDP per capita to $2.4K

The share of medium and small businesses in GDP is ~ 20%, and provides ~ 45% of jobs in the real sector.

2017: GDP per capita

Financial system

Central Bank

Main article: Central Bank of Iran

Currencies: Fog and cryptocurrencies

• Main article: Fog (Iranian currency)
• Cryptocurrencies in Iran
• Digital rial

Inflation

2022: Inflation in November - 52.2%

2020: Inflation and key rate

2019: Inflation 47.2%

According to the Iranian Statistical Center, inflation in Iran in 2019 was 47.2%, and prices for certain categories of goods, such as food and fuel, increased by 63.5%. Property prices have risen 82% over the past year.

Investments

2023

Russia became the largest investor in Iran

At the end of fiscal 2022 in Iran, which ended March 22, 2023, the Russian Federation became the largest investor in the economy of this country, providing $2.76 billion. This was announced on March 23, 2023 by the Minister of Economy and Finance of the Islamic Republic Ehsan Khandouzi.

According to the Financial Times, in total, Iran attracted approximately $4.18 billion in external investments over the year. Thus, Russia accounted for two-thirds of all investments, or 66%. Other major investors were Afghanistan and Iraq, which provided Iran with $256 million and $223 million, respectively. For comparison, in fiscal 2021, this country attracted approximately $1.45 billion in foreign direct investment (according to UN statistics).

The second most important investment partner of Iran, Ehsan Handuzi, called China. But according to the results of fiscal 2022, the PRC accounted for about $131 million of the total amount of funds provided, which corresponds to sixth place in the list of the largest investors in the state.

We define our relations with Russia as strategic and work together in many areas, especially in the economic sphere. China and the Russian Federation are our two main economic partners, and Iran is going to develop its relations with them through the implementation of strategic agreements, "Handuzi said.

It is noted that Russia supported three large-scale Iranian projects in the industrial, mining and transport sectors. In January 2023, the central banks of Iran and Russia signed an agreement to organize the interaction of their interbank communications systems in order to stimulate bilateral trade. In total, foreign investors in fiscal 2022 provided funds for the development of 185 projects in the Islamic republic.^[1]

Russia invested $2.7 billion in Iran in 15 months

Over the past 15 months, Russia has invested $2.7 billion in the Iranian economy. This is about half (45%) of all foreign investments in Iran during the specified period. This was announced at the end of January 2023 by the Deputy Minister of Economy and Finance of Iran Ali Fekri.

He noted that Russian investments, first of all, were directed to two Iranian oil projects in the province of Ilam. Among other major investors in Iran, the official named, Turkey,, and PEOPLE'S REPUBLIC OF CHINA. UAE Afghanistan According to Bloomberg the newspaper, citing the newspaper Donya-e Eqtesad, Russia was ahead China and became the largest investor in Iran. While the PRC had "more options," it cut spending for 2022 by limiting them to logistics centers or border facilities that are linked to its own exports to Iran, Ali Fekri reported.

Ali Fekri said that in just 15 months, $5.9 billion dollars of foreign investment was sent to the Iranian economy. At the same time, the target was at the level of $10.2 billion, the deputy minister noted.

On January 25, 2023, the State Duma of the Russian Federation confirmed plans to create a stablecoin (the common name for cryptocurrencies), secured by gold and intended for international settlements, including with Iran. Anatoly Aksakov, head of the State Duma Committee on the Financial Market, said that during a recent visit of the Russian delegation to Tehran, the parties discussed the likelihood of using digital financial assets, including when paying for batches of Russian agricultural products. As the parliamentarian noted, the Iranian side has formed an impressive debt for the supply of goods from Russia. In addition, the existence of two rial rates against the US dollar (official and market) create inconvenience for Russian ^[2]

2021: China and Iran sign 25-year cooperation agreement

Iran is an official part of China's Belt and Road initiative. In March 2021, it became known that China agreed to invest $400 billion in Iran over 25 years in exchange for stable oil supplies. Investments will be directed to dozens of areas, including banking, telecommunications, ports, railways, healthcare and information technology. Military cooperation will also develop, including joint exercises, military research and new weapons. And, as expected, the exchange of intelligence. A few years ago, in Iran, many criticized too close rapprochement with China after the visit of Xi Jinping in 2016. But now "everything is different":^[3] necessary to break through the isolation China^[4].

But China, as always, is flexible. Immediately after the successful deal with Iran, Chinese Foreign Minister Wang Yi visited Iran's main rival, Saudi Arabia, as well as Turkey, and plans to visit the United Arab Emirates, Bahrain and Oman in the coming days.

2020: Foreign direct investment $1.2 billion

Stock market

The stock market is essentially the only way for individuals and companies in Iran to protect themselves from hyperinflation. From 2017 to 2021. the capitalization of the stock market in local currency increased by about 15 times, significantly ahead of inflation. The market capitalization in 2021 reached 56,000 trillion riyals, which is $1.3 trillion at the official exchange rate and $220-230 billion at the open market rate. The Tehran Stock Exchange (TSE) has more than 100 brokerage companies.

Banks

2024: Russia and Iran 'linked' financial messaging systems

Russia and Iran integrated their systems for transmitting financial messages, thanks to which the countries were able to completely abandon SWIFT. This was announced in January 2024 by the Deputy Head of the Central Bank of Iran for International Affairs Mohsen Karimi. Read more here.

Gas production

Main article: Oil and gas production

2022: Need for tens of billions of dollars in investment to boost gas production

In April 2022, Iran said it needed tens of billions of dollars in investment in its gas sector, stressing that it would find it difficult to ramp up production even if the US lifted sanctions.

Iran has the world's largest proven gas reserves after Russia. But it may be forced to import fuel in the coming years, Oil Minister Jawad Ouji said.

2018: Natural gas reserves

Oil production

Main article: NIOC (National Iranian Oil Co.)

• Oil exports from Iran

2023: Production rises to 3.2 million bpd - 5-year record

For 2023, Iran was able to increase oil production to a five-year high of about 3.2 million barrels per day, earning more than $10 billion in additional revenue. This is despite draconian US sanctions aimed, at least on paper, precisely at Iran's oil industry.

In 2023, Iran produced an average of 445,000 barrels per day more than a year earlier, according to the International Energy Agency. Thus, Iran became the second largest source of oil production growth in the world in 2023, second only to the shale industry. USA

The price of Brent crude, the global benchmark, averaged 82 dollar per barrel in 2023. However, Tehran is forced to sell its oil at a discount to buyers in countries such as. China

In 2023, Iran sold about 80 million barrels of oil and other petroleum products that were stored on tankers. That sale likely brought in about $5 billion more.

The question of how Iran managed to increase production despite US sanctions is controversial, but it can be reduced to three general theories. According to one, Washington has turned a blind eye to sanctions enforcement, using a stream of petrodollars as a carrot to bring Iran to the negotiating table for a new nuclear deal. Since Biden took office, Iran's oil production has risen nearly 50%. Additional Iranian oil has also contributed to lower gasoline prices ahead of U.S. elections in 2023.

A second theory states that in 2023, Washington's priority was to lower oil prices to undermine Russia's ability to conduct a military sting operation in Ukraine, and increasing Iranian oil production was the only way to achieve that.

A third theory is that Iran has become smarter by finding ways around sanctions, and Washington has failed to close the gap.

In reality, all three theories played a role.

2022: Production of 2.5 million barrels of oil per day

Since the 2015 nuclear deal, Iran's oil production has soared and then fallen again. As of July 2022, Iran produces about 2.5 million barrels of oil per day, according to Bloomberg.

2018: Oil Production Dynamics

2017

Mining

2023: Iran reveals world's second-largest lithium deposit

In early March 2023, information appeared that one of the world's largest lithium deposits was discovered in Iran. According to Iran's Ministry of Industry, Mines and Trade (MIMT), the field could contain about 8.5 million tons of recoverable lithium, making it the second largest on the planet. With this in mind, Iran is ahead of Australia and in March 2023 ranks second in the world in lithium reserves after Chile. Read more here.

Power

2023: Iran begins construction of its first nuclear power plant based on its own technology

At the end of October 2023, the construction of the Karun nuclear power plant began in Iran. Its capacity will exceed 300 megawatts. Read more here.

2020: Energy consumption per capita

and

Foreign trade

Oil exports

Main article: Oil exports from Iran

2024

Iran purchased civilian helicopters in Russia for 20 billion rubles

Iran has signed a contract for the purchase of civilian helicopters in Russia in the amount of about 20 billion rubles. The head of the rescue and emergency assistance organization of the Red Crescent Society of Iran, Babak Makhmudi, spoke about the implementation of this agreement at the end of May 2024.

During the last visit of President Ebrahim Raisi, who tragically died on May 19 [2024] in the Bell 212 helicopter crash, to Russia, the purchase of search and rescue and fire helicopters was discussed, he said.

Mi-8 helicopter

According to the source Sheets"" in the Russian aviation industry, we are talking about the purchase of 12 search and rescue and three fire helicopters of the Mi-8/17/171 family. Deliveries are expected to begin in 2024, and all vehicles should be handed over to Iran in the next 3-4 years.

According to Yuri Lyamin, an expert at the Center for Analysis of Strategies and Technologies, Iranian civil services mainly have Mi-17/Mi-171 helicopters purchased in the 2000s, as well as old Western vehicles. The expert notes that the Iranian Red Crescent Society requires both new heavy helicopters of the Mi-17/171 type and lighter vehicles.

The representative of Rostec stressed that the Mi-8 family helicopters have proven themselves well in the countries of the Middle and Middle East. According to him, they are distinguished by high reliability and the ability to fly in difficult conditions, including in the highlands, which distinguishes them from their "capricious" foreign counterparts.

According to Mahmudi, the purchase of Russian helicopters will allow updating Iran's civilian helicopter fleet, becoming the basis of its search, rescue and firefighting forces. The contract worth 20 billion rubles confirms the deepening of military-technical cooperation between Russia and Iran against the background of geopolitical rapprochement between the two countries.^[5]

India takes control of terminal at Chabahar port to connect to North-South corridor

India in May 2024 signs a long-term agreement with Iran to operate a terminal in the strategic port of Chabahar, seeking to expand trade in Central Asia.

India expects the project to improve its connection to the North-South international transport corridor, which is being developed jointly with Iran and Russia.

2023

Trade turnover of Russia and Iran for the year decreased by 17.3%

The trade turnover of Russia and Iran in 2023 decreased by 17.3% compared to 2022 and amounted to about $4 billion. This was announced at the end of February 2024 by Deputy Prime Minister Alexander Novak at a meeting of the intergovernmental commission on trade and economic cooperation.

According to him, the decrease in trade between the countries is due to high indicators in 2022 - then the trade turnover of Russia and Iran reached a record almost $5 billion thanks to the supply of agricultural goods.

Azadi Tower, Tehran, Iran

We have, of course, the potential to increase trade turnover. In almost every sector of goods and services. Work is underway, barriers are removed. There are opportunities for the development of trade not only in agricultural products, but also in the energy sector, in the sector of oil and gas chemistry, mechanical engineering, and processing. I am sure that trade turnover will increase between our countries, - said Alexander Novak (quoted by Interfax).

In 2023, the volume of Russian exports to Iran amounted to $2.7 billion, a decrease of 27.1% compared to the volume of one year ago. Imports of products from Iran to the Russian Federation during this time increased by 15.8% and amounted to $1.29 billion. The main supplies of Russian goods to Iran in 2023 fell on:

• food and agricultural raw materials ($2.2 billion, share - 81.1%);
• machinery, equipment and vehicles ($240 million, 8.8%);
• wood and pulp and paper products ($152.4 million, 5.6%);

Russia and Iran have almost completely switched to settlements between countries in national currencies and use their own systems for transmitting bank messages. The agreement on the creation of a free trade zone (FTA) between the EAEU and Iran, signed in 2023, is expected to cause an increase in trade between Iran and Russia.^[6]

EAEU and Iran signed a free trade agreement

In December 2023, the EAEU and Iran signed a free trade agreement, instead of the previously existing temporary treaty.

Rising imports from China

Free trade zone with EAEU created

In January 2023, Iran and the Federal Antimonopoly Service (FAS RF) created a free economic zone. The parties signed a memorandum on free trade in Tehran.

2022

China is the largest export destination

Trade turnover between Russia and Iran grew by 20% $4.9 billion

In early March 2023, the Chamber of Commerce and Industry of the Russian Federation reported that at the end of 2022, trade between Russia and Iran amounted to $4.9 billion. This is 20% more than in 2021.

Earlier it was reported that trade between Russia and Iran in 2022 reached $4.6 billion, which is almost 15% higher than a year earlier. This was announced on January 23, 2023 by the speaker of the State Duma RFVcetyslav Volodin during a meeting of the commission for cooperation between the parliaments of the two countries.

The Chairman of the State Duma stressed that it is "extremely important for Moscow and Tehran to build up economic potential," including through cooperation in the fields of trade, transport, logistics, power, agriculture, banking, investment and customs regulation.

Volodin also said that the share of the ruble and real estate in mutual settlements exceeds 60%. Work is nearing completion on the joint use of the national payment systems Mir and Shetab, he added on January 23, 2023.

This will minimize the impact of sanctions, but also, of course, resolve issues related to mutually beneficial cooperation, an increase in trade between our countries, the State Duma speaker is sure.

He noted that great potential is seen in the implementation of joint large-scale infrastructure projects, expanding the interaction of the Eurasian Economic Union (EAEU) with Iran.

We are talking about the planned conclusion of a platform agreement on a free trade zone instead of an interim agreement. This is especially relevant in the context of the implementation by our countries of the project to create an international transport corridor "North-South," the Chairman of the State Duma also said.

In October 2022, Prime Minister Mikhail Mishustin announced that Russia and Iran could continue to expand mutual trade. He added that the country's companies are ready to offer Iran advanced technologies in the field of digital economy and telecommunications. The interim free trade agreement between the EAEU and Iran also contributes to the growth of trade.^[7]

Trade turnover between Russia and Iran exceeded $4 billion in 10 months

The trade turnover of Russia and Iran in 10 months exceeded a record $4 billion. For comparison, for the entire 2021, the volume of trade between the countries was below this mark. At the same time, exports of products from Russia increased by 27%, and imports - by 10%.

More than 40% of the trade between Russia and Iran is carried out in rubles, the Russian currency may become the main one in bilateral trade relations, said Iranian Ambassador to Moscow Kazem Jalali in December 2022.

Trade between Russia and Iran from January to July amounted to $2.7 billion and increased by 42% compared to the same period last year.

2021: Trade turnover growth with Russia by 81% to $4 billion

At the end of 2021, trade turnover between Russia and Iran grew by 81% and reached its maximum level in recent years - almost $4 billion, Russian Deputy Prime Minister Alexander Novak said in May 2022.

1700: Ban on UK imports of cotton fabrics from India, Iran and China

In 1700, the English parliament banned the import of cotton fabrics from India, Iran and China.

Internet

2022: National Information Network's own internet and local apps

The country has its own Internet - National Information Network, local clones of Western applications have appeared. In 2022, instead of YouTube, Aparat operates in the country, instead of Facebook - Cloob, instead of Uber - Snapp, etc.

The App Store is blocked, Google Play no, but A) many Western applications are not available there (or the developers block, or themselves) Iran and B) you cannot pay for paid applications.

The easiest way to download local applications in the local analogue of Google Play is Cafe Bazaar, but also the Iranians have learned to bypass restrictions and use Google Play, for example, using:

• Visa and Master cards of foreign banks (for a very large number of the population);
• Foreign gift cards, they are traded by many companies in Iran.

The local Central Bank and government agencies are actively promoting the payment of utilities and goods online, so the share of such payments is high.

Industry

The sanctions of the United States and the EU countries led to the active development of individual industries: for example, by 2021, oil refining and petrochemicals appeared, the local auto industry took a dominant position, built a whole pharmaceutical industry.

Automotive industry

Auto industry: for 2021, local players Saipa and Khodro dominate with a share of ~ 40%, but under license they gather and old French models Peugeot and Renault (share also ~ 40%). There are Chinese Chery players and Brilliance China Auto.

Transport

The problem of the fleet

The big problem for 2022 is the fleet, which is very outdated. The last aircraft was purchased by Iran Air in 1994. By European standards, flights on such aircraft are considered unsafe.

In December 2022, satellite images of Mehrabad International Airport in Tehran appeared on the Web, which clearly showed four passenger Airbus A340-300. All aircraft previously belonged to the Turkish airline Turkish Airlines and were decommissioned in the spring of 2019.

Because of the sanctions, the Islamic Republic cannot officially purchase Boeing or Airbus products, vital in an aging fleet. Therefore, for the purchase, the Iranians used a scheme with intermediary companies.

First, all four liners were acquired by a certain Hong Kong company AVRO Global, which relocated them to the international airport of South African Johannesburg. The boards received registration of the island of Guernsey - the crown possession of Britain.

A few years later, standing in South Africa, the planes suddenly acquired registration numbers of Burkina Faso, after which they flew from Africa towards Uzbekistan.

However, when passing Iranian airspace, the crews reported an emergency on board and urgently landed in Tehran.

As a result, all four former Turkish Airbus A340 ended up in Iran. In the near future, they will clearly replenish the fleet of either one of the country's airlines or the Islamic Revolutionary Guard Corps Air Force.

North-South Corridor

In October 2022, Russia proposed to Azerbaijan and Iran to create a single logistics operator on the North-South international transport corridor according to the model of the existing OTLK ERA, which is owned on a parity basis by the railways of Russia, Kazakhstan and Belarus.

However, unlike the OTLK ERA route, the railway in the new direction is not developed enough, it is not even continuous. The development of routes is much more active in the message Russia - Azerbaijan than through the border of Azerbaijan with Iran, where the cargo flow does not exceed 500 thousand tons.

Russia and Iran are preparing a new transcontinental trade route that will stretch from the eastern outskirts of Europe to the Indian Ocean, a 3,000-kilometer passage inaccessible to any foreign interference.

According to Bloomberg, as of December 2022, the two countries spend billions of dollars to speed up the delivery of goods along rivers and railways associated with the Caspian Sea. Vessel tracking data compiled by Bloomberg shows that dozens of Russian and Iranian vessels are already cruising this route, including those sanctioned.

The created trade corridor will allow Russia and Iran to reduce thousands of kilometers from existing routes.

Cosmonautics in Iran

Main article: Cosmonautics in Iran

Agriculture

2021: Share of farmland - 28%

2019: Low use of pesticides in agriculture

Unemployment

2020: Unemployment rate - 12.2% or less

2019: Unemployment rate - 12.5%

Unemployment in 2019, according to various sources, is over 30% (according to official information - 12.5%), while the percentage of youth under 30 years old is extremely high in the country - 60%.

R&D

2020: R&D spending - $4.2 billion

Consumption

Meat

2023: Poultry meat is the most consumed type of meat

Economic history

2021: Sanctions Bypass Schemes

For 2021, Iran is actively using gray export schemes. For example, oil in trucks or tanks is delivered to Iraq, where it "changes citizenship," after which it is exported. Or unmarked tankers are used, which ship oil at a high discount at a number of foreign ports. On such schemes, Iran loses from 10% to 30% of revenue.

An alternative method of cross-border settlements was the informal Hawala system, based on netting between brokers within the network. The system is widespread in Y. Asia and the Middle East and existed long before the advent of the banking system. Hawala consists of several thousand brokers around the world, and its annual turnover is estimated at $100 + billion.

2019: US-led nuclear deal ruptured and UN sanctions tightened

In 2018-2019 There was a rupture of the nuclear deal at the initiative of the United States and the tightening of UN sanctions:

• ban on the purchase of Iranian oil,
• ban on transactions with the Central Bank of Iran and blocking reserves,
• a ban on the supply of a number of metals, coal and industrial equipment to Iran,
• disconnecting the banking sector from SWIFT.

In 2019, Britain, France and Germany launched a financial transaction mechanism (INSTEX2) in 2019, allowing goods to be imported into Iran bypassing sanctions. At the 1st stage, it was planned to import medicines, medical and agricultural goods, in the future the list will be expanded.

2015:5 UN sanctions packages

In 2006-2015, 5 packages of UN sanctions against Iran were adopted:

• a ban on the import into Iran of nuclear technologies and materials, as well as military products;
• freezing the accounts of companies and persons, a ban on investments in the Iranian oil and gas and oil refining industries;
• a ban on the sale to Iran of technologies that can be used in the military or oil sector;
• a ban on transactions with Iranian financial institutions.

2012: Disconnection from SWIFT and transfer of settlements to banks of neighboring countries

After the shutdown SWIFT in 2012, Iranian business and physical. persons began to be actively used for settlements,, banks UAE,, Turkey Iraq Taiwan as well as international branches of Iranian banks.

Notes