Iran’s Unemployment Rate May Soar As High as 26 Percent by 2021

Iran’s economy has been growing at a rate of 5 percent a year in the past three decades. According to forecasts by the Research Center of the Majlis (the Iranian Parliament), the country’s sluggish economic growth will cause the unemployment rate to rise significantly in the coming years.

In a report, the Center warns that the unemployment rate could, in the worst case, reach 26 percent by 2021.

According to the Statistical Center of Iran, the unemployment rate stood at 12.4 percent in 2016. There are currently 2.2 million jobless people in the country, the majority of whom are 30 years old or younger. It is projected that the ranks of the unemployed increase by between 900,000 and 950,000 people, if not more, each year. Experts believe that only a significant boost to the economy can create jobs and reduce unemployment.

Citing a number of job market studies, the Tasnim News Agency argues that conventional economic stimulus plans will only increase the unemployment rate in the coming years. The news agency is closely affiliated with the Islamic Revolutionary Guards Corps (IRGC).

Experts believe that to tackle unemployment and boost the economy by 8 percent, the government has to encourage domestic and foreign investment in the coming years. The Majlis approved the Sixth Development Plan for (2016-2021) in March 2017. The plan aims to increase the number of people in employment by 950,000 a year for the next five years. This translates into almost five million jobs, which clearly requires a massive level of investment.

Iran’s First Vice President, Ishaq Jahangiri, has described the country’s massive unemployment rate as a major challenge. Jahangiri believes that improving relations with the international community, encouraging foreign investment and engaging much more with the private sector are keys to tackling unemployment.

Speaking at a session of the Resistance Economy HQ recently, Jahangiri said: “We need approximately 770 trillion Toman ($238 billion) in order to create 950,000 job opportunities every year. The funds must be generated through foreign investment, the government budget, the treasury, banks and the private sector.” The total sums required for the entire five-year period will exceed $1 trillion, an unrealistic target.

The deputy director of Iran’s Statistics Center, Alireza Zahedian, predicts that by 2041, people who leave the labor force will outnumber those who enter the job market. Zahedian stresses that 900,000 jobs need to be created in order to reduce the unemployment rate to 11 percent. “In order to reduce the unemployment rate by only one percent, the government must create 780,000 jobs by 2019, and another 400,000 by 2021,” he says.