Allegations of manipulated economic data in the Islamic Republic of Iran

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Allegations of manipulated economic data in the Islamic Republic of Iran are frequently examined by economists assessing the nation's economic conditions, referring to discrepancies between government-released statistics and those from independent or alternative sources. [1] [2] [3] The subsequent sections highlight outline some of these inconsistencies.

Contents

Background

Antigovernment protests after the death of Mahsa Amini in Tabriz - September 2022 Antigovernment protests after the death of Mahsa Amini in Tabriz - September 2022 (02).jpg
Antigovernment protests after the death of Mahsa Amini in Tabriz - September 2022

The collapse of autocratic regimes, like Iran, [4] is often caused by large-scale public mobilization and collective action. [5] Individuals' decision to participate in strikes and protests is based on their perception of others' willingness to do the same. [5] Consequently, autocratic governments, frequently manipulate economic data to shape public perceptions of the economy's condition. [5] Empirical evidence indicates that such regimes may inflate reported growth rates by as much as 35%. [6] By projecting an artificially optimistic economic outlook, these governments seek to suppress the belief that economic hardship is widespread, thereby minimizing public discontent and reducing the likelihood of mass demonstrations or potential regime change. [5] [6]

Gross Domestic Product (GDP)

In early 2020, conflicting reports emerged regarding Iran's economic performance for the first nine months of 2019. That year, Iran's Minister of Economy, Farhad Dejpasand, asserted that the agricultural sector had experienced economic growth and that the industrial sector had expanded by 7.5%, signaling positive growth in the non-oil economy. In contrast, Iran's Statistical Center reported an overall economic contraction of 7.6% when accounting for oil revenues and zero growth when excluding oil. [7]

Similarly, former President Hassan Rouhani's claim of 7.4% economic growth during his tenure was met with skepticism from Iranian economists and lawmakers. [8] Critics contended that the reported figures did not align with industrial output or employment trends. [8]

The size of the public sector workforce

According to official statistics, 14.77% of Iranian employees work in the public sector, a proportion comparable to that of OECD countries. [9] However, Iran's labor force participation rate is approximately 41%, significantly lower than the OECD average of 78.8%. [10] The Islamic Republic of Iran employs around 8 million individuals, of whom roughly 3 million hold formal positions within the three branches of government, the armed forces, and leadership institutions. [11] These roles encompass bureaucratic staff, civil servants, and uniformed military personnel. [11]

Beyond the formal government structure, approximately 2.3 million individuals are employed in quasi-governmental organizations, including state-owned enterprises, national banks, municipalities, and the Islamic Azad University. [11] Additionally, about 2.5 million pensioners receive state stipends, often distributed through the Relief Committee, a government-controlled charitable organization. As a result, nearly one in ten Iranian citizens maintain a regular financial connection to the state. [11]

Defense

According to official data, as of 2023 Iran spends 10.3 billion USD or 2.1% of its GDP on national defense. This percentage is similar to that in other countries such as UK, France and Finland. [12]

Iran Ministry of Defense New Weapons Ceremony and Young Soldier Festival Iran Ministry of Defense New Weapons Ceremony and Young Soldier Festival (014).jpg
Iran Ministry of Defense New Weapons Ceremony and Young Soldier Festival

In 2025, the Iranian budget bill granted 51% of the total oil and gas export revenues, estimated at about 12 billion euros, to the Islamic Revolutionary Guard Corps (IRGC) and the Law Enforcement Command (LEF). [13] [14]

In addition to the, Iran Iran finances Hezbollah, the Yemeni Houthis, Iraqi militia, and Hamas. The average annual budget reserved for the funding of Iran's proxies is estimated at approximately US$1.6 billion. [15] According to Syrian opposition sources, beginning in 2011, Iran allocated a total of US$50 billion to maintain the Assad regime in Syria. However, this investment proved to be a failure following the eventual collapse of the regime. [16] [17]

The most costly of Iran's defense expenditures is that of its nuclear program. The estimate total cost of Iran's nuclear program until 2025 approaches 500 billion USD. [18] [19] As a result of its nuclear program Iran is subject to international sanctions, causing a long term economic stagnation which cost Iran an additional US$1.2 trillion over 12 years. [20] [21] Furthermore, the sanctions led to a significant decline in foreign direct investments (FDI), with Iran experiencing a reduction of approximately 80% in FDI between 2011 and 2021. [22]

Inflation

The official inflation rate in Iran in 2023 was 44.58%, [23] However the excessive price increases, particularly of food, led people to perceive inflation rates as higher than the official figures. [24] The table below compares the price inflation in Tehran versus that in Berlin between 2010 and 2023, according to Numbeo. [25]

ProductFrom yearTo yearAvg. price increase TehranAvg. price increase Berlin
Milk20102023140%65%
Bread20102023235%-1%
Eggs20102023163%98%
Rice20112023112%40%
Chicken fillets20112023185%42%
Potatoes20122023199%118%

In 2024, The minimum cost of living in Iran was estimated at $500, yet workers’ wages stood at a mere $136. [26] The rapid erosion in the purchasing power of salaries raised a suspicion that the true inflation rate is higher than the reported one. [27] [28] [29] Moreover, Iranian media stated that the true inflation rate in 2023 was 70%. [24]

Academic degrees

Iran suffers from over-education and over-supply of academic degrees. In 2015–2016, over 4.3 million students were enrolled in universities in Iran, which accounts for more than 5% of the country's total population, or 7.4% of its adult population (aged 19 and above). [30] In comparison, in 2016, 20.4 million students, or a little over 6% of the U.S. population (8.3% of the U.S. adult population aged 19 and above), attended college. [30] The U.S. economy was then approximately 47 times that of Iran's, and many of the graduates from U.S. colleges and universities were foreign nationals, who will likely contribute to the labor forces of their home countries. [30]

The salaries of workers in the Iranian public service are considerably influenced by the academic qualifications of the individual. The table below presents the average salaries for government officials of the same rank in 2025, differentiated by their levels of higher education. [31] [32]

DegreeSalary
High school education547,200,700 IRR
Certificate or diploma627,600,400 IRR
Bachelor's degree845,998,100 IRR
Master's degree1,064,400,600 IRR
Doctorate1,322,097,006 IRR

The considerable wage premium to degrees, which does not take into account the quality of the degree, created an industry of fake degrees. [33] These counterfeit credentials are sold to those who seek to improve their career prospects or gain political favor. [33] [34] This market is not limited to lower-tier degrees but also extends to advanced academic qualifications, including doctoral degrees, which are often seen as essential for gaining prestige and advancing within the professional world. The cost of such degrees can be substantial, with PhD diplomas priced as high as $9,000. [33] [35] [34]

The state of inequality

According the inequality dataset of the world bank, in 2002 the Gini index in Iran was 34.8, [36] a level that is considered to be quite modest. [37] However, closer data analysis reveals significant wealth concentration, with the top 10% of earners holding 52.7% of the national income - a larger share than in the United States or European countries. [38]

Economic disparity is also evident within the public sector. Many Iranian state employees face significant financial hardship, with salaries as low as $200 per month, however, some Majlis representatives receive monthly salaries ranging from 200 to 250 million tomans (or more than $59,172 according to the exchange rate of January 2024). [39] Additionally, they receive extra bonuses during religious holidays and on “Parliament Day” and “Employee Day,” along with perquisites like Nowruz and Yalda Night snacks. [40]

Inequality is also evident in access to essential services such as water supply. In Tehran impoverished districts struggle with inadequate water provision and hazardous water quality, while affluent areas, housing many of the nation's economic elite, including high-ranking government and Islamic Revolutionary Guard Corps (IRGC) officials, are largely unaffected by these shortages. [41]

Related Research Articles

<span class="mw-page-title-main">Politics of Iran</span>

The politics of Iran takes place in the framework of an Islamic theocracy which was formed following the overthrow of Iran's millennia-long monarchy by the 1979 Revolution. Iran's system of government (nezam) was described by Juan José Linz in 2000 as combining "the ideological bent of totalitarianism with the limited pluralism of authoritarianism". Although it "holds regular elections in which candidates who advocate different policies and incumbents are frequently defeated", Iran scored lower than Saudi Arabia in the 2021 Democracy Index, determined by the Economist Intelligence Unit.

<span class="mw-page-title-main">Economy of Iran</span>

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 is suffering from an energy crisis. Also, some allegation were made that Iran manipulates its economic data.

<span class="mw-page-title-main">Education in Iran</span>

Education in Iran is centralized and divided into K-12 education plus higher education. Elementary and secondary education is supervised by the Ministry of Education and higher education is under the supervision of Ministry of Science, Research and Technology and Ministry of Health and Medical Education for medical sciences. As of 2016, around 94% of the Iranian adult population is literate. This rate increases to 97% among young adults ages between 15 and 24 without any gender consideration. By 2007, Iran had a student-to-workforce population ratio of 10.2%, standing among the countries with the highest ratio in the world.

<span class="mw-page-title-main">Tehran Stock Exchange</span> Iranian stock exchange

The Tehran Stock Exchange (TSE) is Iran's largest stock exchange, which first opened in 1967. The TSE is based in Tehran. As of October 2024, 663 companies with a combined market capitalization of US$ 94 billion were listed on TSE. TSE, which is a founding member of the Federation of Euro-Asian Stock Exchanges, has been one of the world's best performing stock exchanges in the years 2002 through 2013. TSE is an emerging or "frontier" market.

<span class="mw-page-title-main">Central Bank of Iran</span> Iranian central bank

The Central Bank of the Islamic Republic of Iran, also known as Bank Markazi, was established under the Iranian Banking and Monetary Act in 1960, it serves as the banker to the Iranian government and has the exclusive right of issuing banknote and coinage. CBI is tasked with maintaining the value of Iranian rial and supervision of banks and credit institutions. It acts as custodian of the National Jewels, as well as foreign exchange and gold reserves of Iran. It is also a founding member of the Asian Clearing Union, controls gold and capital flows overseas, represents Iran in the International Monetary Fund (IMF) and internationally concludes payment agreements between Iran and other countries.

<span class="mw-page-title-main">Economy of the Middle East</span>

The economy of the Middle East is very diverse, with national economies ranging from hydrocarbon-exporting rentiers to centralized socialist economies and free-market economies. The region is best known for oil production and export, which significantly impacts the entire region through the wealth it generates and through labor utilization. In recent years, many of the countries in the region have undertaken efforts to diversify their economies.

<span class="mw-page-title-main">National Petrochemical Company</span>

The National Petrochemical Company (NPC), a subsidiary to the Iranian Petroleum Ministry, is owned by the government of the Islamic Republic of Iran. It is responsible for the development and operation of the country's petrochemical sector. Founded in 1964, NPC began its activities by operating a small fertilizer plant in Shiraz.

<span class="mw-page-title-main">Healthcare in Iran</span>

For health issues in Iran see Health in Iran.

<span class="mw-page-title-main">Construction industry of Iran</span>

The construction industry of Iran is divided into two main sections. The first is government infrastructure projects, which are central for the cement industry. The second is the housing industry. In recent years, the construction industry has been thriving due to an increase in national and international investment to the extent that it is now the largest in the Middle East region. The Central Bank of Iran indicate that 70 percent of the Iranians own homes, with huge amounts of idle money entering the housing market. Iran has three shopping malls among the largest shopping malls in the world. Iran Mall is the largest shopping mall in the world, located in Tehran. The annual turnover in the construction industry amounts to US$38.4 billion. The real estate sector contributed to 5% of GDP in 2008. Statistics from March 2004 to March 2005 put the number of total Iranian households at 15.1 million and the total number of dwelling units at 13.5 million, signifying a demand for at least 5.1 million dwelling units. Every year there is a need for 750,000 additional units as young couples embark on married life. At present, 2000 units are being built every day although this needs to increase to 2740 units. Iran's construction market will expand to $154.4 billion in 2016 from $88.7 billion in 2013.

<span class="mw-page-title-main">History of the Islamic Republic of Iran</span> History of Iran after the 1979 revolution

One of the most dramatic changes in government in Iran's history was seen with the 1979 Iranian Revolution where Shah Mohammad Reza Pahlavi was overthrown and replaced by Ayatollah Ruhollah Khomeini. The authoritarian monarchy was replaced by a long-lasting Shiite Islamic republic based on the principle of guardianship of Islamic jurists,, where Shiite jurists serve as head of state and in many powerful governmental roles. A pro-Western, pro-American foreign policy was exchanged for one of "neither east nor west", said to rest on the three "pillars" of mandatory veil (hijab) for women, and opposition to the United States and Israel. A rapidly modernizing capitalist economy was replaced by a populist and Islamic economy and culture.

<span class="mw-page-title-main">Energy in Iran</span>

Energy in Iran is characterized by vast reserves of fossil fuels, positioning the country as a global energy powerhouse. Iran holds the world's third-largest proved oil reserves and the second-largest natural gas reserves as of 2021, accounting for 24% of the Middle East's oil reserves and 12% of the global total.

The 2007 gasoline rationing plan in Iran was launched by president Mahmoud Ahmadinejad's cabinet to reduce that country's fuel consumption. Although Iran is one of the world's largest producers of petroleum, rapid increases in demand and limited refining capacity have forced the country to import about 40% of its gasoline, at an annual cost of up to USD $7 billion.

<span class="mw-page-title-main">Banking and insurance in Iran</span>

Following the Iranian Revolution, Iran's banking system was transformed to be run on an Islamic interest-free basis. As of 2010 there were seven large government-run commercial banks. As of March 2014, Iran's banking assets made up over a third of the estimated total of Islamic banking assets globally. They totaled 17,344 trillion rials, or US$523 billion at the free market exchange rate, using central bank data, according to Reuters.

<span class="mw-page-title-main">Economic history of Iran</span>

Prior to 1979, Iran's economic development was rapid. Traditionally an agrarian society, by the 1970s the country had undergone significant industrialization and economic modernization. This pace of growth had slowed dramatically by 1978 as capital flight reached $30 to $40 billion 1980 US dollars just before the revolution.

<span class="mw-page-title-main">Subsidies in Iran</span> Government finance to reduce prices in Iran

The economy of Iran includes a lot of subsidies. Food items, such as flour and cooking oil, are subsidized, along with fuels such as gasoline. However cutting subsidies can cause civil unrest.

<span class="mw-page-title-main">Corruption in Iran</span>

Corruption in Iran is widespread, especially in the government. According to a report in 2024, Iran ranks close to the bottom on the Corruption Perception Index of Transparency International. While Ali Khamenei claims corruption in the country is "occasional rather than systemic," corruption in Iran is an instrument of national strategy and a core feature of the political order.

<span class="mw-page-title-main">Pakistani economic crisis (2022–present)</span> 2022-2024 economic crisis in Pakistan

Pakistan has experienced an economic crisis as part of the 2022 political unrest. It has caused severe economic challenges for months due to which food, gas and oil prices have risen. As of 1 January 2025 Pakistan inflation rate was 4.1% lowest in 6.75 years.

As of December 2024 Iran was experiencing its deepest and longest economic crisis in its modern history. The ministry of social welfare last year announced that 57 percent of Iranians are having some level of malnourishment. Thirty percent live below the poverty line. Iranian Rial became world's least valuable currency.

<span class="mw-page-title-main">Political slogans against the Islamic Republic of Iran</span>

The political slogans against the Islamic Republic of Iran are a series of slogans and expressions used by the Iranian public to voice opposition to the Islamic regime and its government. These slogans have developed over the years as a response to widespread discontent with the country's socio-political environment. Many Iranians say that the 1979 revolution, which overthrew the Shah's monarchy, initially promised democracy and freedom, but resulted in the establishment of a theocratic regime under the leadership of Ayatollah Khomeini. Over time, these political slogans have become a significant tool for expressing dissent, reflecting the aspirations of millions seeking freedom, justice, and systemic change in Iran.

Salaries in Iran were considerably devaluated in recent years the as Iran struggles with economic sanctions and rising inflation rates. The result is a decrease in the purchasing power of salaries. The result is that more and more citizens cannot provide themselves with the most basic needs as were defined by the government.

References

  1. ↑ Amiri, Hoshang (2024-04-18). "Fabricated Statistics in Iran's Economy". Iran Focus. Retrieved 2025-01-12.
  2. ↑ Farhadi, Noah; Lahooti, Hooshang (2023). "In Data We Trust: Proving Market Manipulation on the Tehran Stock Exchange". International Journal of Business and Management. 17 (4): 1. doi: 10.5539/ijbm.v17n4p1 .
  3. ↑ Khatinoglu, Dalga (2024-02-07). "How Iran Manipulates Foreign Investment Statistics". iranintl.com. Retrieved 2025-01-12.
  4. ↑ "Iran: Country Profile". Freedom House. Retrieved 2025-01-30.
  5. 1 2 3 4 Hollyer, J. R.; Rosendorff, B. P.; Vreeland, J. R. (2015). "Transparency, protest, and autocratic instability". American Political Science Review. 109 (4): 764–784. doi:10.1017/S0003055415000428.
  6. 1 2 Martinez, L.R. (2022). "How much should we trust the dictator's GDP growth estimates?". Journal of Political Economy. 130 (10): 2731–2769. doi:10.1086/720458.
  7. ↑ Aslani, Mostafa (2020-02-25). "Iran's False Economic Statistics". Iran News Update. Retrieved 2025-01-05.
  8. 1 2 Writer, Staff (2016-12-22). "Iran: Rouhani's Scandal on Announcing Fake Economic Growth". NCRI. Retrieved 2025-01-05.
  9. ↑ "Public Sector Size by Country 2024". worldpopulationreview.com. Retrieved 2025-01-07.
  10. ↑ "Iran Labour Force Participation Rate, 2018 – 2024 | CEIC Data". www.ceicdata.com. Retrieved 2025-01-07.
  11. 1 2 3 4 Anvari, Amirhadi. "The 8 million Iranians on the Islamic Republic's payroll". content.iranintl.com. Retrieved 2025-01-07.
  12. ↑ Trends in World Military Expenditure, 2023 (Report). SIPRI. April 2024.
  13. ↑ Khatinoglu, Dalga (2024-10-24). "Iran's Armed Forces to receive 51% of government's oil export revenues". iranintl.com. Retrieved 2025-01-07.
  14. ↑ "Iran plans to increase military budget by 200 percent". Al Jazeera. Retrieved 2025-01-07.
  15. ↑ "Iran's Islamist Proxies in the Middle East | Wilson Center". www.wilsoncenter.org. 2025-01-13. Retrieved 2025-01-07.
  16. ↑ "Deep Dive: Syria's foreign debt to Iran". Amwaj.media. Retrieved 2025-01-09.
  17. ↑ Rasmussen, Sune Engel. "Iran Suffers Blow of 'Historic Proportions' With Assad's Fall". WSJ. Retrieved 2025-01-09.
  18. ↑ Qaed, Anas Al (2021-04-25). "Iran's Nuclear Program Might Not Be Worth the Cost". Gulf International Forum. Retrieved 2025-01-07.
  19. ↑ "Opinion: The true cost of Iran's nuclear gamble". Yahoo News. 2024-10-04. Retrieved 2025-01-12.
  20. ↑ "Sanctions Cost Iran $1.2 Trillion Over 12 Years, Businessman Says". iranintl.com. 2024-06-24. Retrieved 2025-01-07.
  21. ↑ Khatinoglu, Dalga (2021-12-05). "How Much The Nuclear Program Has Impoverished Iran". iranintl.com. Retrieved 2025-01-07.
  22. ↑ "Iran Foreign Direct Investment, 1997 – 2024 | CEIC Data". www.ceicdata.com. Retrieved 2025-01-09.
  23. ↑ "Iran Inflation Rate 1960-2025". www.macrotrends.net. Retrieved 2025-01-09.
  24. 1 2 Soghom, Mardo (2023-05-19). "In Absence Of Official Stats, Media In Iran Say Inflation Is At 70%". iranintl.com. Retrieved 2025-01-09.
  25. ↑ "Historical Prices in Tehran". www.numbeo.com. Retrieved 2025-01-09.
  26. ↑ Rajabi, Sia (2024-03-26). "Iran's Actual Inflation Rate Higher Than Official Stats". Iran Focus. Retrieved 2025-01-09.
  27. ↑ Amiri, Hoshang (2025-01-04). "Unprecedented Inflation And Rising Prices In Iran's Food Market". Iran Focus. Retrieved 2025-01-19.
  28. ↑ Gobadi, Shahin (2020-12-19). "The false statistics of the Central Bank reflect Iran's bankrupt economy |". People's Mojahedin Organization of Iran. Retrieved 2025-01-09.
  29. ↑ www.cato.org https://www.cato.org/blog/irans-inflation-statistics-lies-lies-mehr-lies . Retrieved 2025-01-09.{{cite web}}: Missing or empty |title= (help)
  30. 1 2 3 "Update from Iran: Iran's Over-Education Crises". World Bank Blogs. Archived from the original on 2024-12-18. Retrieved 2025-01-12.
  31. ↑ "Average Government Officer Salary in Iran for 2025". World Salaries. Retrieved 2025-01-12.
  32. ↑ "Average Salary in Iran 2024 - The Complete Guide". www.salaryexplorer.com. Retrieved 2025-01-12.
  33. 1 2 3 Samii, Bill. "Analysis: The Problem With Iran's Diploma Mills". RadioFreeEurope/RadioLiberty. Retrieved 2025-01-12.
  34. 1 2 Katiraie, Jubin (2021-11-13). "Iran: Widespread Corruption, Fake Diplomas, Ph.Ds. Sold at $9000". Iran Focus. Retrieved 2025-01-12.
  35. ↑ Novak, Poorang (2022-08-23). "Iran Regime's Educational System; From Deprivation of Education To Fake Doctorate". Iran News Update. Retrieved 2025-01-12.
  36. ↑ "World Bank Open Data". World Bank Open Data. Retrieved 2025-01-14.
  37. ↑ Kuznar, Lawrence (2019). "Iran inequality report". NSI Aggrieved Populations Reports.
  38. ↑ "World". WID - World Inequality Database. Retrieved 2025-01-14.
  39. ↑ "Most Accurate Exchange Rates". www.exchange-rates.org. Retrieved 2025-01-07.
  40. ↑ Taghati, Amir (2024-02-16). "Leaked Documents Expose Iranian MPs' Lucrative Salaries Amidst Economic Hardship". NCRI. Retrieved 2025-01-07.
  41. ↑ Nasri Roodsari, Elmira; Hoseini, Parian (2021). "An assessment of the correlation between urban green space supply and socio-economic disparities of Tehran districts—Iran". Environment, Development and Sustainability. 24 (11): 12867–12882. doi:10.1007/s10668-021-01970-4. hdl: 10419/287117 . ISSN   1573-2975.
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