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The Iranian Economy: Challenges and Opportunities

Author

Listed:
  • Vasily Astrov

    (The Vienna Institute for International Economic Studies, wiiw)

  • Mahdi Ghodsi

    (The Vienna Institute for International Economic Studies, wiiw)

  • Richard Grieveson

    (The Vienna Institute for International Economic Studies, wiiw)

  • Robert Stehrer

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

The Iranian economy has greatly benefited from the lifting of international sanctions in 2016, when the JCPOA nuclear deal came into force. Oil production and exports rebounded strongly, which spilled over into non-oil sectors. However, the economy is yet to return to its 1976 peak in real per capita GDP terms, reflecting numerous challenges over the past four decades, including poor policy choices and the fallout from persistent conflict with the US. This report presents a broad overview of the Iranian economy, and identifies the main challenges to long-run economic development, including in foreign trade and investment, fiscal, monetary and exchange rate policy, and the institutional environment. It concludes that an already difficult situation for Iranian policy-makers will be exacerbated by the US decision to pull out of the JCPOA, and the introduction of new sanctions.

Suggested Citation

  • Vasily Astrov & Mahdi Ghodsi & Richard Grieveson & Robert Stehrer, 2018. "The Iranian Economy: Challenges and Opportunities," wiiw Research Reports 429, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:rpaper:rr:429
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    References listed on IDEAS

    as
    1. Robert Pollin & Andong Zhu, 2006. "Inflation and economic growth: a cross-country nonlinear analysis," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 28(4), pages 593-614.
    2. Ms. Inci Ötker, 2007. "Moving to Greater Exchange Rate Flexibility: Operational Aspects Based on Lessons from Detailed Country Experiences," IMF Occasional Papers 2007/005, International Monetary Fund.
    3. Leiderman, Leonardo & Maino, Rodolfo & Parrado, Eric, 2006. "Inflation Targeting in Dollarized Economies," Foerder Institute for Economic Research Working Papers 275699, Tel-Aviv University > Foerder Institute for Economic Research.
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    Cited by:

    1. Jafari Sadeghi, Vahid & Nkongolo-Bakenda, Jean-Marie & Anderson, Robert B. & Dana, Léo-Paul, 2019. "An institution-based view of international entrepreneurship: A comparison of context-based and universal determinants in developing and economically advanced countries," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    2. Amat Adarov & Mahdi Ghodsi, 2021. "The impact of the Eurasian Economic Union–Iran preferential trade agreement on mutual trade at aggregate and sectoral levels," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(1), pages 125-157, March.
    3. Jafari-Sadeghi, Vahid & Amoozad Mahdiraji, Hannan & Bresciani, Stefano & Pellicelli, Anna Claudia, 2021. "Context-specific micro-foundations and successful SME internationalisation in emerging markets: A mixed-method analysis of managerial resources and dynamic capabilities," Journal of Business Research, Elsevier, vol. 134(C), pages 352-364.
    4. Amat Adarov & Mahdi Ghodsi, 2020. "The Impact of the EAEU-Iran Preferential Trade Agreement," wiiw Working Papers 179, The Vienna Institute for International Economic Studies, wiiw.
    5. Mahdi Ghodsi & Mohammad Sharif Karimi & Robert Stehrer, 2020. "Does Asymmetric Nonlinear Approach Explain the Relationship Between Exchange Rate and Trade of Iran?," wiiw Working Papers 187, The Vienna Institute for International Economic Studies, wiiw.

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    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F19 - International Economics - - Trade - - - Other
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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