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Population -The years following the 1979 revolution saw a raprd increase in the population of Iran. The latest official figures for the Iranian year that ended in March 2001 show that the annual growth has now been stabilized at about 1.1 %. The present population size, provided by the Iran's Statistic Centre, is about 65.5 million. (It is worth mentioning that the same statistic estimated by the United Nation Information Centre surpasses 70 million; though, when contacted, the UN said that they are currently studying the discrepancy.)
Demography -What appears very important in Iran's population figures is the fact that 51 % of the country's population is under 20 years old. This demographic structure exerts pressure on the Iranian government to reform the Iranian economy in such a way as to meet the needs of the expanding workforce. Even though over the past few years the population growth has slowed, due to the  demographic structures, the rate is still high and according to some estimates Iran will have close to 100 million people by the year 2050.
The diagram below shows the demographic age distribution of the population based on 1996 figures, the last year that a national census was taken.

Graph: Demographic Age-Distribution of Iran's Population (in million)

Urbanization -Another interesting development is the urbanization of the country. Traditionally a rural society, Iran has developed into a modern urban society over the past 30 years. In 1956, 69% of the population lived in rural areas; today, 63% are urban dwellers and more than 50% of the urban population has already grown up in an urban environment. With urbanization, Iran is developing the need for modern systems and products, among other things.
Table: Projected Demographic Profile

Source: Plan & Budget Organization

Ethnics -Iran's unique location at the crossroads of Arabia, Turkey and Central Asia has resulted in many ethnic groups being found within its borders. Just over half of the population is of Persian origin, while a quarter is Turkish-speaking Azeris of Azerbaijan. A large group of Kurds, and smaller minorities of Lors, Bakhtyaris, Arabs, Armenians, Turkmen and Baluchis also exist in certain regions. There are four main religions in Iran: Islam, Christianity, Judaism and Zoroastrianism.

Macroeconomic Indicators
GDP -Following a sharp decline in output immediately after the revolution and a significant increase in oil prices in 1979, the economy enjoyed moderate growth up to 1985. However, following the 1988 ceasefire, substantial rehabilitation and reconstruction projects, expansionist monetary policies and an overvalued exchange rate, coupled with rationing and pricing controls, led to economic distortions. Growth resumed in the early 1990s partially fuelled by short-term external borrowing. The resultant need to repay debt restricted imports of crucial production inputs and contributed to weaker GDP growth in the mid-1990s. GDP growth was further impacted by weak oil prices in 1997-1998 and, in 1999, by reduced oil exports to comply with OPEC quotas and the impact of drought on agricultural production before increased exports and a stable oil price stimulated GDP growth in 2000.
Iran's GDP for 2001 was about $107 billion, up 4.8% compared to the previous year. The country's GDP per capita for 2001 was $1,631. The following table sets out the growth rate in real terms of Iran's GDP for the periods indicated.

Table: GDP Growth (1997-2001)

1 Using IMF weighted average rates of IRR 2,780 = USD $1.00 in 1997, IRR 3,206 = USD$1.00 in 1988, IRR 4, 172=USD$1.00 in 1999, IRR 5,731=USD$1.00 in 2000 and IRR 6,200=USD$1.00 IN 2001.

The following table sets out GDP in current prices and real GDP growth (using the expenditure approach) and in percentage terms for the period indicated:
Table: GDP Breakdown 1

Source: Central Bank

GDP Distribution -The structure of Iran's GDP continues to be determined by its reliance on oil. As the recipient of crude oil revenues, the State remains the dominant economic actor. The oil sector's share of GDP has declined from between 30-40% in the 1970s to between its more recent levels of 10 & 20%, principally as a result of policy decisions taken at the time of the revolution to reduce production and exports and diversify the production base of the country as well as a lack of investment in the oil sector. However, oil revenue still provides approximately 80% of export earnings and nearly half of government revenue. As a result, this sector is the prime recipient of foreign
2 Assuming a population of 60-mn in 1995 growing at a constant 1.5% per annum (the growth rate of 1995) and domestic investment. Iran currently produces oil to the limit of its OPEC quotas.
The graph below represents the breakdown of key sectors in the Iranian economy for 2001 and shows that Iran has today a well-diversified economy.
Graph: GDP Breakdown 2

Source: Statistical Centre of Iran

The table below presents the breakdown of service sector branches in the Iranian economy for 2001.

Table: GDP Breakdown 3

The following table shows Iran's GDP by economic sector in current prices and by percentage contribution for the periods indicated:

Table: GDP Breakdown 4

In 1997, real GDP rose by 3.4% reflecting a moderate increase in the non-oil sector and a substantial decline in the oil sector as a result of the decline in world oil prices. In 1998, real GDP grew by 3.9% principally as a result of growth in the agriculture and services sectors with oil recording only a small increase and manufacturing and mining recording nearly zero growth. In 1999, growth in real GDP was 1.6%. The manufacturing and mining sector grew by 10.6% as a result of increased construction activity and the services sector grew by 3.8% as a result of an increase in transportation, warehousing and communication.
The oil sector recorded a decline in growth of 6% and agriculture a decline of 9.4% as a result of a drought in that year in the east and southeast parts of the country. In 2000, real GDP grew by 5.7% with the oil sector growing by 4.8% as production increased in line with OPEC quotas and prices strengthened. Manufacturing and construction and services also recorded significant growth. In 2001, real GDP grew by 5.7% with manufacturing and construction growing by 10.0% and 12.3% respectively. Agriculture and services each grew by approximately 5%, whilst oil declined by 8.4% reflecting reduced production in line with agreed OPEC quota reductions designed to
achieve price stability.
The non-oil industrial sector has suffered from uncertainties in the privatization process as well as from a suppression of imports through much of the 1990s as Iran sought to conserve foreign exchange to meet its debt repayment obligations.
In 2001, the four most significant contributors to GDP growth were construction, manufacturing, trade and transportation, which together accounted for 4.1 % of GDP growth.
The following table sets forth the growth in real GDP (at constant 1990 prices) for the periods indicated:

Table: GDP Breakdown 5

 Growth rates in the oil sector have been significantly impacted by changes in the price of oil and the level of production as Iran conforms to revised OPEC quotas from time to time. In the non-oil sector State investment in agriculture and wider production
export-based items produced significant growth in this sector over much of the 1990s although successive years of drought in 1999 through to 2001 caused a contraction in real terms in 1999 and restricted growth in subsequent years. The manufacturing and
mining sector has grown strongly in recent years led principally by increased construction activity and increased imports of raw material. The services sector has also seen consistent growth in recent years but has been affected by currency exchange restrictions, excessive bureaucracy and uncertain long-term planning. 
Inflation -Inflation in Iran, measured by the consumer price index in urban areas, has been in double Figures since 1991 and peaked at approximately 50% in 1995. In recent years monetary expansion due to financing the budget deficit, the depreciation of the market exchange rate, the removal of some subsidies and the suppression of imports have all contributed to rising prices. In 1997, average annual inflation was 17.4%. This increased slightly to 18.1 % and 20.1 % in 1998 and 1999 respectively before falling sharply to 12.6% in 2000 reflecting improved economic conditions and enhanced public confidence in the stability of economy as well as the implementation of non- expansionary monetary and fiscal policies. In 2001, the downward trend in inflation continued and at the end of the year it stood at 11.4%.
Exchange rate reform in March 2002 is not expected to have an inflationary impact. This is because government financing has been made available which is designed to replace implicit subsidies with explicit ones so as to ensure that there are no price increases. In addition, there should be no significant monetary expansion as a result of the government's decision to finance the increased cost of settling existing debt obligations. At the time of exchange rate unification, tariff reductions were also implemented which offset the increased cost of imports caused by unification.
It is possible; however, that budget deficit financing could increase inflation if the ambitious revenue targets set in the 2002 budget are not met.
Wages -There are only limited statistics available on wages. The table below sets out the index of wages, salaries and fringe benefits for construction workers in the private sector produced by the Central Bank.
There is a statutory minimum wage set by the High Council on Labour every year. In real terms, the statutory minimum wage has increased from Rls. 242,919 per month in 1996 to Rls. 320,405 per month in 2001. The statutory minimum wage for 2002 is
Rls. 700,000 8
 
Table: Wages (1998-2002)

Unemployment -The unemployment rate for 2001 was 15.7%. The unemployment rate is relatively higher among females and, in recent years, in urban areas as opposed to rural areas. It is very likely that the official unemployment figures understate its
true position as a result of the methodology used in the surveys.
Based on the most recent census, the total population aged 10 years and over in Iran numbered approximately 45 million, of which the economically active part was approximately 16 million (estimated by December 2001 to have increased to 18.6 million). The remaining 29-mn million were classified as students, homemakers (all men or women not being economically active or students) or income recipients (those not being economically active, students or home-makers but who received a pension or other income).
Employment among the economically active population (those aged 10 years or over who are either employed or unemployed but actively seeking work) was 86.9% in 1997. This increased to 87.5% in 1998 before falling in 1999 and 2000 to 86.5% and 85.8%, respectively. The rate of employment is marginally higher among males and, in recent years, in rural areas as opposed to urban centres. It is likely that the official figures overstate the true employment position as a result of the methodology used in the surveys.
Approximately one-half of Iran's population at the time of the last census was under 20 years of age, a fact that is expected to result in increased pressure on employment rates in the future. The government has sought to address this by financing job creation projects and implementing measures to raise production and investment. The 2001 budget law allocated U.S. $1 billion from the Oil Stabilization Fund to the private and co-operative sector in this respect as well as a further US$ I billion specifically for job creation projects.Notwithstanding these initiatives, the existing labour law makes it extremely difficult to terminate established employment contracts and the combined tax and social security costs of employment are equivalent to approximately two- thirds of each employee's wage.
Foreign Debt -In 2001, Iran's foreign debt was about $8 billion, constituting only a mere 7% of the GDP, confirming a healthy economy.
Foreign Reserve -Iran's foreign reserves principally comprise its foreign exchange balances, which have grown significantly in recent years following the establishment of the Oil Stabilization Fund3, The country's net foreign reserves are about $12.6 billion. The reserves have grown in recent years reflecting improved oil earnings and reduced external debt repayment obligations, as rescheduled external debt has been paid.
Exchange Rate -Iran's exchange rate system used to be based on multi- layered system, where state and para-state enterprises would benefit from the preferred rate and hence creating an unhealthy competition environment. However, as of March 2002, the multi-tiered system has been replaced by a unified single market driven exchange rate. The official rate on 4 March 2003 was 7,970 Rials for US$1. The following chart demonstrates the US dollar fluctuations from September 2001 to September 2002. The Central Bank of Iran plans with the assistance of the IMF to make the Rial fully convertible in the course of 2003.

Graph: Exchange Rate from 1 Mar 2002 -1 Mar 2003

Liquidity -In general, the Iranian monetary policy has been aimed at curbing the liquidity and hence controlling the inflation. Despite a target liquidity growth of 16.4% in 2001, a range of factors, including the need to accommodate higher than expected economic growth and to finance the Rial resources of the budget, the liquidity grew by 28.8% over the mentioned year. The target liquidity growth for
2002 is 15.7%.
The following table displays the liquidity and money supply (in billion Rials) for 2000 and 2001.
 
Table: Liquidity

3 Money put aside, from the sales of higher that projected oil prices, to offset future oil price fluctuations.
Price Indices -Various price indices and their breakdowns for 2000 and 2001 (percentage change over previous period) are presented in the table below.

Table: Price Index Break Down

Table: Governmental Budget