Economy of Iran

Iran is a large land.

It has much oil and gas.

This helps the country.

Many people work in farms. They grow food like wheat.

Other people work in big shops.

Sometimes life is hard. Prices for food can go up. This makes things difficult for families.

Many people have moved away. They go to find new jobs.

People in Iran work hard to make things better.

Iran is a large country with a big economy.

It has a lot of oil and gas.

In fact, Iran has 10% of the world's oil. It also has 15% of the world's gas. This makes it very important for energy.

Many people in Iran work in different ways. Some work on farms to grow food.

Others work in factories or in shops. The government also runs many parts of the economy. Large religious groups called bonyads also help run things.

Life in Iran has had many ups and downs. A big war with Iraq lasted eight years. This war cost a lot of money. Since 1979, the economy has grown slowly. High prices for goods, called inflation, make life hard. Many people have moved to other countries for work. Recently, wars and sanctions have caused more problems. This has led to protests by many people.

People want a better life and fairer rules.

Iran has a very large and complex economy.

It uses a mixed system where both the government and private businesses work together. The country is often called an energy superpower. This is because it holds 10% of the world's proven oil reserves. It also holds 15% of the world's gas reserves.

Most of the money the government makes comes from selling this oil and gas. Other important parts of the economy include farming, manufacturing, and services.

Over 40 different industries are traded on the Tehran Stock Exchange.

Many different things keep the economy moving every day. Agriculture is a major part, though production has fallen since the 1960s.

Many people still work as farmers to grow food. The service sector is actually the largest part of the economy today. Manufacturing is also a big piece of the puzzle.

Large religious foundations called bonyads play a unique role here. These groups have huge budgets that make up over 30 percent of government spending. The government also uses subsidies to help control the price of food and energy.

History shows that Iran's economy has changed many times. Long ago, the Persian Empire used gold for its coins.

In the 1800s, leaders began to change how farming worked. By the 1920s, the country started to build modern banks.

During the rule of Reza Shah Pahlavi, the country built better roads and industries. This was a time of relative stability and growth. Before 1979, the economy was developing very quickly.

However, things changed significantly after the Islamic revolution in 1979.

Since 1979, Iran has faced many difficult times. The Iran-Iraq War lasted from 1980 to 1988 and cost about $500 billion.

This war caused a deep recession and slowed growth for many years. International sanctions have also made things harder for the country. In 2015, a nuclear deal briefly removed most of these sanctions. This helped the tourism industry and lowered inflation for a short time. But the US left the deal in 2018 and added more sanctions. This caused the economy to struggle once again.

Today, the economy faces new and serious challenges. In 2025, a conflict with Israel caused billions in damage. The value of the Iranian rial has fallen very low. It even traded at more than one million rials to one US dollar. This caused prices for basic goods to rise very quickly.

High inflation and low living standards led to many protests in late 2025. Students, workers, and merchants joined together to show their frustration. These events show how hard it can be to manage a large economy during times of conflict.

The economy of Iran is a complex, mixed system. It combines central planning with private business activities.

This means the government plays a very large role in managing resources and industries. Iran is often called an "energy superpower" because of its massive natural resources. The country holds 10% of the world's proven oil reserves. It also holds 15% of the world's proven gas reserves.

These hydrocarbons, which include oil and gas, are the primary drivers of the nation's wealth.

Several major sectors drive the Iranian economy. The service sector is currently the largest part of the economy. This is followed by the industrial sector, which includes mining and manufacturing.

Agriculture is also a vital part of life, though its production has fallen since the 1960s.

In the manufacturing sector, Iran has a broad and diversified base. This includes making things like cars at the Iran Khodro factory.

There are also over 40 different industries traded on the Tehran Stock Exchange.

A unique part of Iran's economic structure is the role of bonyads. These are large religious foundations that operate within the country. Their combined budgets are very large. They represent more than 30 percent of the central government's total spending. The government also uses a system of subsidies to manage costs. In 2007, a subsidy reform plan was introduced. This plan used price controls on essential items like food and energy. In 2022, the parliament decided to end a major subsidy for importing food, medicine, and animal feed. This specific subsidy was valued at $15 billion in 2021.

Iran's economic history stretches back thousands of years. In 546 BC, the Persians adopted gold as the main metal for their coins.

Modern economic changes began in the 1850s with agricultural reforms. During the 1920s and 1930s, the country established modern banking systems. Reza Shah Pahlavi, who ruled from 1925 to 1941, improved infrastructure and introduced modern industries. This period saw significant social change and economic development. Before the 1979 Islamic revolution, Iran was developing very rapidly. However, the revolution and the subsequent Iran-Iraq War changed the country's direction.

The period following the 1979 revolution has been marked by instability. The Iran-Iraq War lasted from 1980 to 1988. This eight-year conflict cost the economy about $500 billion. It also caused a deep recession, with GDP growing only 0.9% annually between 1981 and 1989. Since the revolution, economic growth has averaged only 1.9% per year. This is much lower than the 9.1% annual growth seen between 1960 and 1979. International sanctions have also played a major role in shaping the economy. In 2015, a nuclear deal known as the JCPOA briefly removed most sanctions. This helped the tourism industry and lowered inflation for a short time. However, the US withdrawal from the deal in 2018 brought sanctions back.

Recent years have brought even more severe financial pressure. In 2025, a brief war with Israel caused billions of dollars in damage. This conflict destroyed more than US$3 trillion in investments. The Iranian currency, the rial, has also struggled significantly. By 2025, the rial plummeted to record lows. It traded at more than one million rials for every one U.S. dollar. This caused inflation to exceed 40%. The rising prices for basic goods led to widespread hardship.

This economic distress triggered massive nationwide protests in late 2025.

These protests involved many different groups of people. Students, workers, and merchants all joined together in demonstrations. These gatherings eventually turned into anti-government protests. The government responded with internet shutdowns and crackdowns. The economy continues to face challenges like high unemployment and a weak banking system. There is also a phenomenon known as "brain drain." This happens when educated people seek jobs in other countries because of the constrained economy. Despite these hardships, Iran continues to manage its vast energy resources and diverse industrial base.