Draft:Allegations of manipulated economic data in the Islamic Republic of Iran

Gross Domestic Product (GDP)

• See also Iranian energy crisis
• See also Water scarcity in Iran

In 2020-2023 the official data showed an impressive growth rate of the GDP per capita of Iran. Despite the impressive growth rates, as of 2024 Iran suffers from a major energy crisis with Many of Its refineries and power plants operating below capacity. Iran's energy supply is currently unreliable, with frequent blackouts and shortages affecting daily life, industries, and essential services. This shortage in basic daily necessities is a potential indicator of a worse economic performance than the one reflected by the official data.

According to "Freedom House" Iran is considered "Not Free". Autocracies are known to inflate their reported growth rates by as much as 35%.

In early 2020, there were conflicting reports regarding Iran's economic performance for the first nine months of 2019:

Farhad Dejpasand claimed significant growth in the agricultural sector and a 7.5% increase in the industrial sector, indicating positive growth in the non-oil economy. Contrarily, the Statistical Center reported an overall economic contraction of 7.6% when including oil revenues, and a zero growth rate excluding oil, suggesting a substantial economic downturn.

The economist Yousefi arguing that the reported figures fail to reflect real improvements in employment, income, or industrial productivity. He contends that the government has a history of manipulating data to mask systemic economic inefficiencies and that true growth cannot be claimed without genuine economic reforms.

Another example is Hassan Rouhani's claim of 7.4% economic growth during his presidency faced criticism from Iranian economists and lawmakers, who questioned the accuracy and transparency of the figures. Critics argued that the reported growth lacked correlation with industrial output or employment improvements, suggesting the data may have been manipulated to present a more favorable image of Iran's economy.

The public sector workforce

• See also Economic activities of the Iranian Revolutionary Guard Corps
• See also Wealth of Khamenei family

According to the official statistics the 14.77% of Iranian employees work in the public sector. This number is quite modest compared to the same numbers is OECD countries. Nevertheless, evidence suggest that a larger share of Iranian workforce is depended on the state.

The average participation rate in labor force in the OECD countries is 78.8%. The equivalent rate is Iran is only about 41%. The Islamic Republic of Iran maintains an extensive and complex state payroll, with approximately 8 million individuals receiving financial benefits directly from the state. This vast network spans government branches, the military, quasi-governmental organizations, and institutions under the direct supervision of Supreme Leader Ali Khamenei. Roughly 3 million are formally employed across the three branches of government, the armed forces, and leadership institutions. These include bureaucratic staff, civil servants, and uniformed military personnel tasked with upholding the regime’s control. Beyond the formal government structure, around 2.3 million Iranians are employed in quasi-governmental entities, including state-controlled companies, national banks, municipalities, and the Islamic Azad University. Additionally, there are approximately 2.5 million pensioners who receive stipends, often from the Relief Committee, a charitable organization under state control. This employment network means nearly one in ten Iranian citizens has a regular financial relationship with the state. Such expansive reach also extends into the security apparatus, where the ratio of armed personnel to ordinary citizens is approximately 1:140, while security personnel, including intelligence operatives, number around 1 per 2,800 citizens.

A significant portion of state employment falls under institutions directly controlled by Supreme Leader Ali Khamenei. These organizations not only manage vast resources but also play a central role in the state’s ideological and economic control. Key entities include:

• Mostazafan Foundation: Employing approximately 49,500 individuals across 190 holdings and companies, this institution manages significant economic assets and is closely tied to the Supreme Leader’s financial interests.
• Astan Quds Razavi: With over 16,000 employees, it manages the Imam Reza Shrine in Mashhad, overseeing both religious affairs and extensive business operations.
• Islamic Republic of Iran Broadcasting (IRIB): As the state’s primary media outlet, IRIB employs around 14,600 people, playing a key role in information control and propaganda dissemination.
• Relief Committee: This charitable organization employs 11,800 individuals, distributing aid while serving as a tool for regime influence over economically vulnerable populations.
• Execution of Imam Khomeini's Order (EIKO): This powerful financial conglomerate employs about 7,400 people, managing vast state assets through subsidiaries like the Tadbir Economic Development Group.
• Barakat Pharmaceutical Group: A key subsidiary of EIKO, Barakat employs approximately 4,000 individuals and gained prominence for producing the COVIran Barekat vaccine during the COVID-19 pandemic.
• Islamic Propagation Organization: Employing 1,700 individuals, this body focuses on ideological control through cultural events, state rallies, and media outlets like Mehr News Agency.
• Islamic Revolution Art Organization (Art Bureau): With 642 employees, this organization produces state-approved cultural works, including propaganda films and literature.
• Special Clerical Court: A judicial body with 271 staff members, this institution handles cases involving clerics, often targeting dissent within the clergy itself.

Despite the vastness of the state payroll, many Iranian state employees face significant financial hardship. Salaries for many of these positions can be as low as $200 per month, a stark contrast to the rising costs of living and inflation plaguing the country. Economic pressures have resulted in growing dissatisfaction among the workforce, with some employees quietly resisting state authority. For example, during the 2022 anti-regime protests, a Mashhad traffic control employee reportedly disabled state-controlled traffic cameras, limiting the regime's ability to track and suppress demonstrators. Such acts of defiance, though rare, highlight the fragility of a system reliant on economic dependency. Nevertheless, not all state employees earn low wages. 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). Additionally, they receive extra amounts during religious holidays and on “Parliament Day” and “Employee Day,” along with benefits like “Nowruz and Yalda Night snacks.

Defense expenditure

According to the official data as of 2023 Iran spends on national defense 10.3 billion UDS or 2.1% of its GDP. This percentage is similar to countries like UK, France and Finland. Nevertheless, the true cost of Iranian defense seem to extend significantly beyond these figures.

According to the 2025 budget bill the the government will provide the Islamic Revolutionary Guard Corps (IRGC), and the Law Enforcement Forces (LEF) with additional 12 billions oil valued in euros, which they can then sell to foreign buyers .

In addition Iran finances Hezbollah, the Yemeni Houthis, Iraqi militia, and Hamas. The average annual budget allocated to funding of Iran's proxies is estimated to be 1.6 billion USD. In addition, Iran invested 50 billion USD to secure the Assad regime in Syria, an investment that proved to be a failed investment in light of the termination of Assad regime.

When estimating the defense expenditure of Iran one must take into account the cost of the nuclear program and its total economic costs. The estimate cost of Iran's nuclear program are 500 billion USD. As a result of the nuclear program Iran was subject to international sanctions. The sanctions caused a long stagnation which cost Iran 1.2 trillion USD over 12 years. An additional cost inflicted on Iran as a result of its defense spendings, and their nature, and the international sanctions is a major reduction in foreign direct investments (FDI). From 2011 to 2021 Iran experienced a reduction of approximately 80% in FDI.

Inflation data

• See also food inflation in Iran

The official inflation rate in Iran in 2023 was 44.58%. However, if we look at the prices of food we see that they increased significantly higher compared to other countries. According to Numbeo From 2010 to 2023 the price of milk in Tehran increased by 140% (compared to 65% in Berlin), the price bread increased by 235% (compared to -1% in Berlin), the price of eggs increased by 163% (compared to 98% in Berlin), the price of potatoes increase from 2012 to 2023 by 199% (compared to 118% in Berlin), the price of rice increase from 2011 to 2023 by 112% (compared to 40% in Berlin), and the price of chicken fillets increase from 2011 to 2023 by 185% (compared to 42% in Berlin).

The excessive price increases, especially of food, caused people to perceive inflation rates higher than the official ones. Moreover, the surge of prices caused salaries not to cover the basic needs. The minimum cost of living is in Iran estimated at $500, yet workers’ wages stand at merely $136. The rapid erosion in salaries purchasing power raised a suspicion that the true inflation rate in higher than the reported one. Moreover, the Iranian media claimed that the true inflation rate in 2023 was 70%.

References

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• Economy of Iran