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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
TEHRAN STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Economic and Political Environment
In many ways, Iran is considered as a good
venue for investment and business.
Geographically, it is located in a unique
strategic point in the Middle East, connecting
Asia to Europe.
Iran, with a population of over 72 million has a
broad domestic market is a quick access to
neighboring markets. The country utilizes
huge diversified resources of trained and
efficient manpower. Also there is a welldeveloped
network of infrastructure across the
country in areas of telecommunications,
energy, and road and rail transportration.
Another benefit for investing in Iran is its huge
and diversified reserves of raw materials and
natural resources such as oil, gas and basic
metals.
Having four seasons weather is an advantage
for agricultural activities in all seasons
throughout the country.
Currently Iran's economy is the sixteenth
largest economy in the world in term of
purchasing power parity (PPP). Iran's
economy is an emerging economy with a
large public sector, including about 50% of the
economy. Iran's exports is based on oil and
gas (80%), and in 2010 nearly 60% of
government revenue resulted from these
resources. Iran's economy is one of the major
economies, which is not severely affected
from the 2007-2009 financial crises.
Reaching the economic independence, full
employment and creating a comfortable and
standard living for citizens are the main longterm
goals of Iran. Of course, the country
faced with many obstacles for meeting these
goals, especially in 2010. In the late 2010, and
in line with the transition from a developing
economy, the fifth development plan is in the
final stage of finalization as a road map for
developing country in the next five years.
Many issues have been examined in this plan,
including weaknesses in the business space,
requirements for economic stability,
transparency and the motivation of
entrepreneurs.
In addition, the strategic plan includes a set of
monetary, financial, budgetary, commercial,
employment, industrial, agricultural policies
and also issues focus on legal and judicial
protection of investors. It seems, with getting
experience of past policies and programs,
Iranian authorities are providing an
appropriate framework for the presence of
entrepreneurs and investors in the different
areas.
Also, for encouraging foreign investors, the
new foreign investment bylaw has been
passed based on international standards. This
bylaw provides full security and support for
foreign investment in Iran. With growing oil
prices in recent years, Iran has this possibility
to earn USD 97 billion per year from oil export.
This revenue growth result in the self-esteem
and increased domestic investment. Based on
Iran central bank's statistics, inflation in 2010
has decreased to 11.5% and economy has
experienced 1.5% growth. In 2010, GDP
reached to USD 427.3 based on official
exchange rate and USD 827 based on
purchase power parity rate (PPP). According
to PPP rate, in that year, Iranians earned USD
12,900 per capita.
In 2008, these figures were 6.4%, USD 382.3
billion, USD 853.8 billion and USD 13,000
respectively.
The general economic policies, ratified during
recent years, to some extent were facing with
oppositions in implementation; however,
establishing the standard infrastructure will
help for further transparency and economic
savings in Iran.
Based on World Bank report in 2008, Iran's
GDP grew 7.8% in that year, which rose the
figure regarding purchasing power parity to
about USD 841.7 billion, spotting the country's
economic at the 16th level, after Australia, and
above the Netherlands, Sweden and Belgium.
Share of agriculture, industry and service
sectors in Iranian economy in 2009 were
respectively, 10.9, 45.2 and 43.9%. The two
former sectors rose 0.1 and 0.9%,
respectively, comparing 2008, but service
sector dropped about 1%.
Iran's workforce population was reckoned as
25.02 million in 2009, and the unemployment
rate with some increase than 2008, reached
11.8%. The figure was reported 10.3% in 2008.
The country's workforce population has ranked
23 among 220 countries and free zone
regions, and its unemployment rate is 128th in
the world.
The inflation rate was reported 13.5 in 2009
with a sharp decline than 25% in 2008.
Iran was ranked 81 in absorbing FDI and 70
for investment on other countries. Total
investment in the country in 2009 had 27.7%
growth and its GDP stood as the global 31st
biggest one in this regard.
Regarding the current account balance, a
sharp decrease occurred in 2009 from USD
20 billion to USD 2.2 billion. Iran's total gold
and foreign exchange reserve was USD 81.31
billion at the end of 2009, which was the
global 14th largest reserve. The foreign debts
accounted for USD 18.7 billion in 2009, a
decline from USD 21 billion, a year precedent.
Iran's total foreign debt is the global 69th.
Iran's capital market had an amazing 2010
year. New records were set, more liquidity
were injected, and better business
environment in the listed companies made the
investment atmosphere more transparent, and
TSE experienced considerable growth in most
of its indicators. During the last year, Tehran
Stock Exchange's main index rose about 50%
and its market capitalization reached an
unprecedented USD 87 billion.
Newly ratified regulations at the capital
market, as well as foreign investment bylaw's
revision have provided economic practitioners
with suitable conditions for investment in Iran.
Information obtained from the Exchange.
Key Information Contacts
Tehran Stock Exchange Corporation; http://www.iranbourse.com
Securities and Exchange Organization; http://www.seo.ir
Iranian Privatization Organization; http://www.en.ipo.ir
TSE’s Technology Management Company; http://english.tsetmc.com
Central Bank of the Islamic Republic of Iran; http://www.cbi.ir
Iranian Chamber of Commerce, Industries and Mines (ICCIM); http://www.iccim.com
Organization for Investment, Economic & technical Assistance (OIETAI) a division of the Ministry of Finance; http://www.investiniran.ir
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