Allegations of manipulated economic data in the Islamic Republic of Iran

Allegations of manipulated economic data in the Islamic Republic of Iran are frequently cited by economists examining the country, pointing to differences between government-released statistics and other sources. Despite official claims of substantive GDP growth from 2020 to 2023, Iran faces severe energy shortages and economic struggles, with contradictory reports indicating economic stagnation and contraction. Moreover, official defense spending is reported at $10.3 billion (2.1% of Iran's GDP), nevertheless, several reports indicate the existence of hidden costs, such as support for foreign militias, developing a nuclear program, and sanctions-related losses. These reports suggest a much greater defense burden. Also, inflation is officially reported at 44.58% but food price surges hint a much higher actual inflation, possibly around 70%.
Background
The collapse of autocracies is frequently driven by large-scale public mobilization and collective action.
Gross Domestic Product (GDP)
In 2020-2023 the official data showed an substantial growth rate of the GDP per capita of Iran. On the other hand, 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 unstable, 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. During the same year, Iran's minister of economy, 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, reported an overall economic contraction of 7.6% when including oil revenues, and a zero growth rate excluding oil, suggesting instead a substantial economic downturn.
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
According to the official statistics the 14.77% of Iranian employees work in the public sector. This number is comparable to OECD countries. However, 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.
A significant portion of state employment falls under institutions directly controlled by Supreme Leader Ali Khamenei. Key entities include: Additionally, they receive extra amounts during religious holidays and on “Parliament Day” and “Employee Day,” along with benefits like “Nowruz and snacks.
Military related 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.
According to the 2025 budget bill the government will provide the , 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 is estimated to be US$1.6 billion. In addition, Iran invested US$50 billion 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 US$500 billion. As a result of the nuclear program Iran was subject to international sanctions. The sanctions caused a long stagnation which cost Iran US$1.2 trillion 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
The official inflation rate in Iran in 2023 was 44.58%. 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. 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%.
* See also food inflation in Iran
Fake 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). In compression, 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. The U.S. economy was then approximately 47 times the size of Iran's, and many of the graduates from U.S. colleges and universities are foreign nationals, who will likely contribute to the labor forces of their home countries.
The salaries of workers in the Iranian public service is considerably affected by the academic degree of the worker. A Government Officer in Iran with a high school education can earn an average salary of 547,200,700 IRR. A Government Officer in Iran with a certificate or diploma education can earn an average salary of 627,600,400 IRR. A Government Officer in Iran with a bachelor's degree education can earn an average salary of 845,998,100 IRR. A Government Officer in Iran with a master's degree education can earn an average salary of 1,064,400,600 IRR. Finally, a government officer with Doctorate earns a salary of 1,322,097,006 IRR.
The considerable wage premium to degrees, a premium that does not take into account the quality of the degree created an industry of fake degrees. Many individuals in Iran have turned to the underground market for fake diplomas and doctoral degrees. These counterfeit credentials are sold to those who seek to improve their career prospects or gain political favor. 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 in the professional world. The prices for such degrees can be very high, with PhDs being sold for as much as $9,000.

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