Iran’s recent economic growth explained in four graphs
This post is a brief look at the latest national accounts data and what they say about Iran’s economy in recent years. The evidence is somewhat puzzling: there is economic growth, albeit slow, while net investment is heading to zero!
(more…)The simple demographics of Iran’s 2024 presidential election
Later this week, on Friday, July 5, a diverse electorate faces a consequential choice for the president of the Islamic Republic of Iran. Voters differ in age, income and ethnicity, but more than any characteristic, age dominates the debate on social media. Masoud Pezeshkian, the candidate promising reform, who has attracted support from a wide array of reformists, is urged to woo the youth vote, the generation Z (ages 18-29). Conventional wisdom is that Pezeshkian’s sharp criticisms of the establishment and promises of greater social freedoms and no filtering of the internet have made the youth a decisive voting bloc that can push the challenger over the top.
(more…)Declining Poverty Under Raisi
The hottest topic in Iran’s impromptu presidential election is economic justice, with inflation a close second, the two topics on which the interests of the poor and the middle class diverge. The tragic death of President Raisi last month has thrown Iran into a contentious election debate in which the performance of his administration is a central issue. Raisi made many promises, most of which had remained unfulfilled at the time of his death. Promises for one million new jobs and one million new homes each year are well below target, as are bringing inflation down and preventing Iran’s currency slide. These failures might have been avoided had he succeeded in his other goal of ending US sanctions.
(more…)Good economic news fails to impress Iranians as they go to the polls
Two pieces of positive economic news were published last week, continued economic growth last fall and lower inflation for the Iranian month of Bahman that ended on February 20. You would think that days before the elections for the parliament and the Assembly of Experts on March 1, they would attract attention and scrutiny. But in Iran public opinion about the economy and elections have moved beyond facts and data. Public opinion because people dismiss official news about the economy as propaganda, and elections because, thanks to heavy vetting, only one side appears to have a chance of occupying the most seats in the two assemblies.
(more…)Why Purchasing Power Parity exchange rates are important for measuring Iran’s economic growth accurately
In this post I explain the logic of the Purchasing Power Parity (PPP) exchange rates (also known as the PPP conversion factors) that economists use to measure an economy’s total production. I also show why PPPs are especially important for measuring changes in the living stands of Iranians in recent decades. In this post I will repeat some of the discussion in a previous post, while adding more intuition and detail. Given the frequency with which misleading analyses of Iran’s economic performance and living standards appear in the popular and professional press, this will probably not be my last discussion of the subject.
(more…)Iranian living standards in times of high inflation
The Iranian year 1401 (2022/2023) was exceptional in several respects. It was the first full year of President Ebrahim Raisi’s administration (August 5, 2021 to present), which proposed a new revolutionary vision that at long last would fulfill the promises of the 1979 revolution. It was also the year that the currency fell precipitously, by 52%, and prices registered a record rate of increase (300% annual rate in June 2022). The rapid increase of prices in the early part of the year, a result of the removal of food subsidies and the Russian invasion of Ukraine, raised fears of hyperinflation, which turned out to be highly exaggerated, as inflation moderated and settled at 45% for the year. Critics of the hardline president predicted that Raisi’s economic policies was severely hurting the poor and the middle class. We finally have the data to find out if they were right.
(more…)Iran in BRICS
There has been much official excitement since Iran was invited (along with Egypt, Ethiopia, Saudi Arabia, South Africa, and UAE) to join the BRICS in its annual summit in Johannesburg. BRICS is not yet a proper organization (with headquarters and staff, for example). It has a website, which is still in development (an article on the site, published Sept 25, mentions Iran as having expressed interest, along with 40 other countries, but not the invitation).
(more…)Is Iran’s inflation moderating?
Note: A hiccup on the WordPress.com site caused this post to be removed after it was published on August 29. I am reposting it here with minor edits.
After some delay, the Statistical Center of Iran (SCI) has published its inflation report for the Iranian month of Mordad that ended on August 20. The report shows that prices were rising faster than in recent months, at 45.3% annual rate compared to an average of 27% for the preceding two months. The report undermines government hopes that inflation might come down to “around 30%” by the year’s end, a goal that the new Central Bank governor, Mohammad Reza Farzin, has been communicating to reporters. He has put inflation control as his main focus.
(more…)Iran poverty rates updated
Recently the World Bank updated the poverty lines it publishes for countries in different income categories from the 2011 PPP version to 2017. The WB lines are used primarily to obtain comparable poverty rates across the globe. They often differ from national poverty lines that governments use to decide who gets anti-poverty assistance and who does not. Iran does not have an official national poverty line, though from time to time official reports appear that offer poverty lines, as did the Ministry of Labor earlier this month. The Iranian government bases its cash and in-kind assistance to the poor on its own criteria. In this post, I update my previous estimates of Iranian poverty rates to the new WB poverty lines.
(more…)Revisiting Youth Social Exclusion in Iran
The strength and the longevity of protests led by young women, later joined by young men, that have engulfed Iran since mid-September suggest that youth grievances go beyond strict dress codes. Years ago, in 2006, I directed the Middle East Youth research program at Brooking Institution’s Wolfensohn Center for Development. In this post I revisit the topic of youth social exclusion, which a few years later would be recognized as the main impetus to the Arab Spring protests.
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Tyranny of numbers 
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