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Unemployment rate estimated at 11.8% in 2020
The funding for the unemployment benefit is likely to derive from the country’s sovereign wealth fund (SWF). It has released the equivalent of €1bn in local currency to the government to help it grapple with the coronavirus situation.
According to the Statistical Centre of Iran (SCI), the country’s unemployment rate stood at 9.8% y/y in the second quarter of 2020, down from 10.6% y/y in the previous quarter. Iran's unemployment rate was estimated to reach 11.8% of the total labor force in 2020. The unemployment rate has been above 10% for the last 10 years, and this rate is estimated to have peaked in 2014 when it reached 14%.
Youth unemployment (covering the 15-29 age range), stands at least twice the general joblessness rate, according to latest available data, while university graduate unemployment is thought to be around 40%. Despite the many times the government has stressed the need to boost employment, overall youth unemployment has risen more than 5% in the past three years.
5.0 External Sector & Trade
5.1 Balance of payments and current account
5.1.1 current account dynamics
Iran’s current account balance likely at -0.5% of GDP in 2020, says IMF
The International Monetary Fund (IMF) estimated in its updated World Economic Outlook in October that Iran’s current account balance as a percentage of GDP would likely be at the 1.1%, -0.5% and 0.3% for 2019, 2020 and 2021, respectively, as a result of the impact of the coronavirus (COVID-19) pandemic.
The IMF estimated that the government held $112bn of foreign assets and reserves in March last year. It also indicated that Iran ran a current account surplus. The figures imply that Iran might withstand the sanctions without an external payments crisis.
But the IMF also noted that Tehran was having difficulty accessing some of its reserves as its relations with foreign banks were constrained by the threat of US sanctions. Meanwhile, sanctions could cut the current account surplus sharply given the severe disruption they are causing to trade.
20 IRAN Country Report March 2021 www.intellinews.com
