Economic trends
The Iranian economy is largely dominated by the public sector which controls nearly 80% of it. The private sector is therefore relatively limited. The economy is very dependent on the oil income which represents nearly 80% of exports and 60% of its fiscal revenue. In this context, the rise of oil price in the recent years has supported the growth. The increase of GDP was 4.9% in 2006, 6% in 2007 and it remained close to this level in 2008. In order to diversify its economy and become less dependent of its oil sector, the government has decided to privatize and open to foreign investment many of the sectors of its economy. However, the progress on this field has been slow. On one side, it still exists a real political resistance to a genuine privatization, while on the other, the current environment (international tensions due to nuclear power, interventionism of the State) creates hesitation among the private and foreign investors in taking risks. Nevertheless, reforms are essential. The public sector does not have resources to create the jobs required in order to reduce the unemployment rate which is estimated at nearly 15% of the active population (30% for the youth). The other major problem in the country is the rise in prices which reached almost 30% in 2008.
Iran was isolated from the international scene due to the United States' embargo. The country was not affected directly by the financial crisis of 2008. It has, however, undergone through a reduction of the oil price which has caused a decrease on the country's income. In 2009, The Islamic Republic of Iran has also been affected by the greatest political crisis since the accession to the revolution in 1979 because of the general protest linked to the reelection of president Ahmadinejad, which provoked demonstrations followed by a significant repression. All these events, have considerably ruined the charm of the country in terms of foreign investment.
Main branches of industry
Agriculture contributes nearly 10% of GDP but employs one-third of the active population. Only 10% of the land is arable and primitive farming methods are used. The main crops are pistachios (world largest producer), wheat, rice, oranges, tea, and cotton. Illicit cultivation of the opium poppy is fairly common. Iran is rich in mineral resources, mainly: oil (4th largest producer in the world), and gas (2nd largest producer in the world), copper, lead, zinc, etc.
Oil production represents 10% of GDP. Industrial and mining sectors contribute nearly 26% of GDP. The textile industry is the second most important after the oil sector. Other major industries are sugar refining, food-processing, petrochemicals, cement, and building & construction. Traditional handicrafts such as carpet weaving and the manufacture of ceramics, silk, and jewelry are also important to the economy.
Services sector contributes nearly half of GDP.
International trade
Iran is a member of the Organization of Petroleum Exporting Countries (OPEC). The share of foreign trade (exports + imports) in the country's GDP is nearly 50%; with oil accounting for 80% of the exports income. The top three export partners are: Japan, China and the European Union. Besides oil, Iran mainly exports pistachio nuts, carpets, petrochemical products, organic chemicals, aluminum, and plastic materials. Its top three import partners are: the UAE (which plays the role of re-exporting center), Germany and France. The main goods imported are: machinery, iron & steel, electric & electronic equipment and cereals.
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