The Iranian Economy:
\nChallenges and Opportunities<\/p>\n
MAHDI GHODSI
\nVASILY ASTROV
\nRICHARD GRIEVESON
\nROBERT STEHRER
\nMahdi<\/p>\n
The Vienna Institute for International Economic Studies
\nWiener Institut f\u00fcr Internationale Wirtschaftsvergleiche<\/p>\n
<\/p>\n
Abstract<\/strong> <\/p>\n CONTENTS The Iranian Economy: Challenges and Opportunities MAHDI GHODSI VASILY ASTROV RICHARD GRIEVESON ROBERT STEHRER Mahdi The Vienna Institute for International<\/p>\n","protected":false},"author":2,"featured_media":2377,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[904],"tags":[1505],"class_list":["post-2372","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-usefull-documents","tag-iranian-economy"],"_links":{"self":[{"href":"https:\/\/amseif.ir\/index.php?rest_route=\/wp\/v2\/posts\/2372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amseif.ir\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amseif.ir\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amseif.ir\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/amseif.ir\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2372"}],"version-history":[{"count":2,"href":"https:\/\/amseif.ir\/index.php?rest_route=\/wp\/v2\/posts\/2372\/revisions"}],"predecessor-version":[{"id":2385,"href":"https:\/\/amseif.ir\/index.php?rest_route=\/wp\/v2\/posts\/2372\/revisions\/2385"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/amseif.ir\/index.php?rest_route=\/wp\/v2\/media\/2377"}],"wp:attachment":[{"href":"https:\/\/amseif.ir\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amseif.ir\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amseif.ir\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThe Iranian economy has greatly benefited from the lifting of international sanctions in 2016, when the
\nJCPOA nuclear deal came into force. Oil production and exports rebounded strongly, which spilled over
\ninto non-oil sectors. However, the economy is yet to return to its 1976 peak in real per capita GDP
\nterms, reflecting numerous challenges over the past four decades, including poor policy choices and the
\nfallout from persistent conflict with the US. This report presents a broad overview of the Iranian
\neconomy, and identifies the main challenges to long-run economic development, including in foreign
\ntrade and investment, fiscal, monetary and exchange rate policy, and the institutional environment. It
\nconcludes that an already difficult situation for Iranian policymakers will be exacerbated by the US
\ndecision to pull out of the JCPOA, and the introduction of new sanctions.
\nKeywords: Iran, European Union, international trade, foreign direct investment, macroeconomic
\nenvironment, privatisation, political economy of sanctions
\nJEL classification: E02, E62, F19, F31, F51, G32, O13, P48<\/p>\n
\n\u06f1\u066b Introduction ………………………………………………………………………………………………………………………………….. 1
\n\u06f2\u066b The legacy of history: Iranian international relations and trends in economic
\ndevelopment since the 1970s …………………………………………………………………………………………………….. 2
\n\u06f2\u066b\u06f1\u066b Developments after the Revolution ……………………………………………………………………………………..2
\n\u06f2\u066b\u06f2\u066b The role of sanctions and isolation ……………………………………………………………………………………..5
\n\u06f2\u066b\u06f3\u066b The role of the public sector and ownership structures ………………………………………………………….6
\n\u06f2\u066b\u06f4\u066b Current Iranian relations with the EU and the US ………………………………………………………………….8
\n\u06f2\u066b\u06f5\u066b The current US withdrawal from the JCPOA ………………………………………………………………………10
\n\u06f3\u066b Key economic and structural indicators of the Iranian economy in a comparative
\nperspective …………………………………………………………………………………………………………………………………… 14
\n\u06f3\u066b\u06f1\u066b Level of development ………………………………………………………………………………………………………14
\n\u06f3\u066b\u06f2\u066b Governance ………………………………………………………………………………………………………………….15
\n\u06f3\u066b\u06f3\u066b Business environment ……………………………………………………………………………………………………..15
\n\u06f3\u066b\u06f4\u066b Infrastructure and communications ……………………………………………………………………………………17
\n\u06f3\u066b\u06f5\u066b Human capital ……………………………………………………………………………………………………………….18
\n\u06f3\u066b\u06f6\u066b Environment ………………………………………………………………………………………………………………….21
\n\u06f3\u066b\u06f7\u066b Demographics ……………………………………………………………………………………………………………….23
\n\u06f4\u066b Iran\u2019s macroeconomic environment and challenges ……………………………………………………….. 25
\n\u06f4\u066b\u06f1\u066b Fiscal policy ………………………………………………………………………………………………………………….25
\n\u06f4\u066b\u06f2\u066b Sovereign wealth fund …………………………………………………………………………………………………….26
\n\u06f4\u066b\u06f3\u066b External balances …………………………………………………………………………………………………………..28
\n\u06f4\u066b\u06f4\u066b Exchange rate: Is the rial overvalued? ……………………………………………………………………………….29
\n\u06f4\u066b\u06f5\u066b Monetary policy ………………………………………………………………………………………………………………31
\n\u06f4\u066b\u06f6\u066b Structure of the economy …………………………………………………………………………………………………33
\n\u06f5\u066b Openness, trade and FDI …………………………………………………………………………………………………………… 38
\n\u06f5\u066b\u06f1\u066b Iran\u2019s Openness ……………………………………………………………………………………………………………..38
\n\u06f5\u066b\u06f2\u066b Trade in services …………………………………………………………………………………………………………….40
\n\u06f5\u066b\u06f3\u066b Trade in goods ……………………………………………………………………………………………………………….41
\n\u06f5\u066b\u06f4\u066b Trade relations with the EU-28 …………………………………………………………………………………………47
\n\u06f6\u066b Summary, conclusions, and challenges ahead …………………………………………………………………… 56
\nReferences ……………………………………………………………………………………………………………………………………………… 60<\/p>\n","protected":false},"excerpt":{"rendered":"