Iran Economic Forecast
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Iran is the world’s fourth largest producer of oil behind Russia, Saudi Arabia and the US – and currently possesses the third largest proven oil reserves in the world after Saudi Arabia and Canada. In 2010, Iran produced 4.172 million barrels of oil per day. At present, Iran possesses 10 percent of the world’s total oil reserves, estimated at 137.6 billion barrels. Oil and oil prices are intrinsically linked to Iran’s economic future.
Iran is the world’s fourth largest producer of oil behind Russia, Saudi Arabia and the US – and currently possesses the third largest proven oil reserves in the world after Saudi Arabia and Canada. In 2010, Iran produced 4.172 million barrels of oil per day. At present, Iran possesses 10 percent of the world’s total oil reserves, estimated at 137.6 billion barrels. Oil and oil prices are intrinsically linked to Iran’s economic future. As Iran attempts to diversify its economy, oil and oil related products still account for 80 percent of Iran’s total export earnings and 60 percent of the government’s budget.
International sanctions against Iran may result in an inaccurate prediction of their economic outlook. The US and UN in particular, have imposed sanctions Iran and other nations, and companies that do business with Iran. The Comprehensive Iran Sanctions, Accountability and Divestment Act was passed by the US Congress in 2010 intends to hinder Iran’s oil and petroleum industry and apply pressure on their nuclear programs. By imposing economic sanctions, The US and UN hope to force Iran into freezing its nuclear programs.
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Iran’s Five-Year Socio-Economic Plan
The government of Iran has recently implemented a five-year economic reform plan designed to make Iran self-sufficient by 2015. One key element to this plan is the elimination of energy subsidies in order to make their industries more competitive on the world arena.
Some of the targets of the plan for 2015 include:
- Become the 12th largest economy in the world according to GDP (PPP)
- Achieve annual growth rates of 8 percent
- Reduce unemployment rates to 7 percent
- Maintain inflation rates at 12 percent
Iran’s GDP Forecast
Iran is currently the 18th largest economy in the world with a GDP (PPP) of US$ 830.715 billion in 2010 – growing 2.49 percent from the previous year. In the next 5 years, Iran’s annual GDP growth is expected to grow to 4.37 percent in 2011 and cap off at 4.87 percent in 2015. Off the back of this growth, Iran’s GDP (PPP) is forecasted to break the trillion dollar mark in 2015 growing to US$1.04 trillion.
Iran’s GDP (PPP) is ranked among the top 20 in the world, however its GDP Per Capita (PPP) ranking is significantly lower at 72nd place. In 2010, Iran’s GDP Per Capita (PPP) was US$11,024.82, rising by 0.79 percent as compared to 2009. It’s anticipated to grow within the next five years by 2.64 to 3.13 percent annually before arriving at US$12,695.63 in 2015.
Iran’s Unemployment Forecast
Iran’s population in 2010 was 77.891 million, with only 25.7 million of the population in the labour force. The figure could be significantly higher as official government census data only considers citizens within a certain age group to be part of the labour force – a significant number of youths below the age of 14 are employed to support themselves and their families. In the labour force, 14.6 percent were unemployed in 2010. Unemployment in Iran increased from 11.8 percent in the previous year.
The reliability and validity of Iran’s current unemployment figures provided by the Iranian government has been called into question as no definitive forecast can be made for Iran’s unemployment rates. Historical data over the past 9 years though has shown Iran’s unemployment rates tend to hover between 11.2 percent to 16.3 percent with a mean of 13.7 percent and a median of 12.5 percent.
Iran’s Inflation Rate & Current Account Balance Forecast
The inflation rate (average consumer price change) in Iran was 9.5 percent in 2010, down from 10.8 percent in 2009. It’s expected that by 2011, inflation will drop to 8.5 percent before levelling off and maintaining a 10 percent level from 2012 to 2015.
In 2010 Iran’s had the 20th largest current account balance in the world of US$14.295 billion – increasing 20.27 percent from the previous year and can be largely attributed to increases in oil prices over the same time period. Iran’s current account balance is expected to grow steadily to US$15.413 billion in 2012 before dipping to US$13.965 billion in 2014. By 2015, Iran’s current account balance is expected to experience a revival and rise up to US$15.687 billion.
