A report from the World Economic Forum (WEF) says that Iran has seen a decline in the inclusiveness of growth, losing over 1.54 percent in its score in the last five years, but still ranks 21st among the 79 developing economies on the Inclusive Development Index (IDI).
The Inclusive Development Index is based on a set of Key Performance Indicators that provide a multidimensional assessment of living standards. The index ranks 109 countries according to their current level of inclusive development, and also provides a view on recent performance over 5 years. Together, these features allow users to understand both the state and direction of inclusive growth around the world.
The country has strong labor productivity relative to its peers, as well as high healthy-life expectancy, low dependency ratio, and manageable debt-to-GDP. The decline in score has mainly been attributed to drops in GDP per capita and labor productivity, as well as low employment and rising wealth inequality. The middle class remains comparatively large, but has been shrinking.
Employment levels are extremely low (rank 76) and Iran’s economy has one of the highest levels of carbon intensity in the world (rank 75). The Framework shows that in terms of addressing some of its challenges, Iran makes good use of fiscal transfers for more equitable outcomes, with a progressive taxation system that provides resources needed for the country’s relatively high spending on social protection.
Priority areas include tackling gender gaps in education, employment, and health; and formalizing informal economic activity, for example by making it easier to start and grow a business.