Economy of Iran

Iran has a mixed, centrally planned economy with a large public sector. It consists of hydrocarbon, agricultural and service sectors, in addition to manufacturing and financial services, with over 40 industries traded on the Tehran Stock Exchange. With 10% of the world's proven oil reserves and 15% of its gas reserves, Iran is considered an "energy superpower". Nevertheless, since 2024 Iran has been suffering from an energy crisis, and a wider economic crisis, which has led to massive protests erupting in late 2025.

Since the 1979 Islamic revolution, Iran's economy has experienced slower economic growth, high inflation, and recurring crises. The Iran–Iraq War (1980–1988), increased corruption, and international sanctions severely disrupted development. In recent years, Iran's economy has faced stagnant growth, inflation rates among the highest in the world, currency devaluation, rising poverty, water and power shortages, and low rankings in corruption and business climate indices. The brief war with Israel in June 2025 further exacerbated economic pressures, causing billions in damage and loss of revenues. Despite possessing large oil and gas reserves, Iran's economy remains burdened by structural challenges and policy mismanagement, resulting in limited growth and a decline in living standards in the post-revolution era.

A unique feature of Iran's economy is the reliance on large religious foundations called bonyads, whose combined budgets represent more than 30 percent of central government spending.

In 2007, the Iranian subsidy reform plan introduced price controls and subsidies particularly on food and energy. Contraband, administrative controls, widespread corruption, and other restrictive factors undermine private sector-led growth. The government's 20-year vision involved market-based reforms reflected in a five-year development plan, 2016 to 2021, focusing on "a resilient economy" and "progress in science and technology". Most of Iran's exports are oil and gas, accounting for a majority of government revenue in 2010. In March 2022, the Iranian parliament under the then new president Ebrahim Raisi decided to eliminate a major subsidy for importing food, medicines and animal feed, valued at $15 billion in 2021. Also in March 2022, 20 billion tons of basic goods exports from Russia including vegetable oil, wheat, barley and corn were agreed.

Iran's educated population, high human development, constrained economy and insufficient foreign and domestic investment prompted an increasing number of Iranians to seek overseas employment, resulting in a significant "brain drain". However, in 2015, Iran and the P5+1 reached a deal on the nuclear program which removed most international sanctions. The sanctions against Iran are accompanied by negative humanitarian impacts. Consequently, for a short period, the tourism industry significantly improved and the inflation of the country was decreased, though US withdrawal from the JCPOA in 2018 and imposing more than 1,500 sanctions against Iran hindered the growth of the economy again and increased inflation.

GDP contracted in 2018 and 2019, but a modest rebound was expected in 2020. Challenges include a COVID-19 outbreak starting in February 2020, US sanctions reimposed in mid-2018, increased unemployment due to the sanctions, inflation, food inflation, a "chronically weak and undercapitalized" banking system, an "anemic" private sector, and corruption. Iran's currency, the Iranian rial, has fallen, and Iran has a relatively low rating in "Economic Freedom", and "ease of doing business". Recently, Iran faces severe economic challenges resulting from long conflict with Israel and the war that broke between the two states, which resulted in a destruction of investments of more than 3 trillion USD.

2025 was marked by a collapsing currency, surging inflation causing widespread unrest. The Iranian rial plummeted to record lows, trading well above one million rials to the U.S. dollar, contributing to inflation rates exceeding 40% and sharply rising prices for basic commodities, causing hardships and nationwide protests. Public frustration over eroding living standards and economic management sparked nationwide protests in late 2025 through 2026 drawing students, workers, and merchants into demonstrations that at turned into anti-government demonstrations, met with internet shutdowns and violent crackdowns by authorities.