Other Briefings2024 Iranian Presidential Elections Results and Economic Outlook
Reformist Masoud Pezeshkian won the 2024 Iranian presidential elections after a runoff, overcoming several conservative candidates. The elections, prompted by the death of President Ebrahim Raisi, saw low voter turnout, indicating a want for change within Iran. Pezeshkian aims to relax social restrictions and improve relations with Western countries but faces significant economic challenges ahead.
By Giulia Interesse
The presidential elections in Iran, held in two phases – on June 28 and July 5, 2024 – resulted in a significant victory for reformist candidate Masoud Pezeshkian, who secured 54.76 percent of the vote in the second round. The elections were prompted by the untimely death of President Ebrahim Raisi in a helicopter crash on May 19, leading to an urgent call for early elections.
In the first round, Pezeshkian led with 44 percent of the vote, followed by Saeed Jalili with 40 percent, Mohammad Bagher Qalibaf with 14 percent, and Mostafa Pourmohammadi with less than 1 percent. As no candidate achieved a majority, a runoff vote was scheduled between Pezeshkian and Jalili.
The runoff, held on July 5, saw Pezeshkian win with 55 percent of the vote. On July 6, the Ministry of Interior declared Pezeshkian the winner, and Jalili conceded.
The first round of voting had a low turnout of 39.93 percent, the lowest in the history of presidential elections in the Islamic Republic. However, the second round saw improved participation, with turnout rising to 49.68 percent.
Pezeshkian is expected to assume the presidency after the ballot certification process is completed, with his inauguration anticipated in early August.
At 69, Pezeshkian overcame several conservative candidates despite being labeled as a “token reformist” and a “second-tier candidate” with limited name recognition. He previously served as the minister of health under Iran’s last reformist president, Mohammad Khatami, from 1997 to 2005, and has been a member of parliament since 2008, serving in the Islamic Consultative Assembly and as the vice speaker of parliament.
He aims to relax social restrictions, such as Iran’s strict hijab law, and improve relations with the West, potentially resuming nuclear negotiations.
2024 Iranian presidential election results
The recent presidential election results in Iran offer some insights into the current political landscape.
Firstly, voter turnout was notably low, indicating a real disconnect between the state and Iranian society. Only 39 percent of eligible voters participated in the first round, the lowest in the history of the Islamic Republic’s presidential elections. This follows a similarly low turnout in the March parliamentary elections, suggesting widespread voter apathy.
Additionally, the typical reformist-conservative divide was less pronounced during this election. The campaign was marked by fierce rivalry within the conservative camp, particularly between Jalili and parliamentary speaker Qalibaf. Despite pressure from the conservative leadership to unite behind a single candidate to avoid splitting votes, neither Jalili nor Qalibaf conceded before the second round. Qalibaf endorsed Jalili after failing to advance, but not all his supporters followed, with some shifting their support to Pezeshkian.
Lastly, the election backed a demand for change within Iran. Advocates for reform managed to mobilize support despite widespread apathy, efforts by security forces to suppress dissent, and the marginalization of key reformist and moderate figures by the establishment. The desire for even minimal reform from within Iran cannot be ignored.
Economic challenges ahead
Iran’s economy had recorded low but promising growth in recent years, with the International Monetary Fund (IMF) estimating a 3.8 percent rise in real GDP in 2022 and a 4.7 percent increase in 2023.
However, the World Bank notes that the Iran economy still faces significant constraints due to economic sanctions, limited access to external markets and advanced technology, and the need for substantial foreign investment. The IMF forecasts that real GDP growth will slow to 3.3 percent in 2024 and 3.1 percent in 2025.
Inflation is another critical issue, with consumer prices rising by 45.8 percent last year. Although inflation is expected to slow, it will remain high at 37.5 percent in 2024. High consumer price inflation has been a chronic challenge in Iran, averaging above 20 percent annually over the past four decades. In recent years, the situation has worsened, with inflation rates exceeding 40 percent for four consecutive years, severely impacting low-income households.
The sharp depreciation of the Iranian rial is another challenge. The currency hit a record low of over 705,000 against the US dollar in April 2024 but recovered to about 596,000 after the election results. Despite having a reformist president, Fitch Ratings expects the Iranian rial to continue depreciating in 2024 due to heightened geopolitical tensions and investor concerns about the upcoming US presidential election in November.
Outlook
The economy remains the Achilles heel for the Iranian government, with addressing long-standing US sanctions that have cost Iran billions in oil revenue being Pezeshkian’s top priority. Soaring prices and reduced spending power due to sanctions and financial mismanagement have left millions of Iranians struggling.
The government is aware that economic challenges persist for the ruling clerics, who fear renewed protests from lower- and middle-income citizens facing hardships since 2017. An insider close to Ali Khamenei, Iran’s Supreme Leader, stated, “Failure to improve the economy will lead to street protests, especially now that people have high hopes due to Pezeshkian’s campaign promises.”
Analysts suggest Iran’s economic outlook remains highly uncertain, particularly with the potential return of Trump as US president, which could result in stricter enforcement of oil sanctions.
About Us
Middle East Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Dubai (UAE), China, India, Vietnam, Singapore, Indonesia, Italy, Germany, and USA. We also have partner firms in Malaysia, Bangladesh, the Philippines, Thailand, and Australia.
For support with establishing a business in the Middle East, or for assistance in analyzing and entering markets elsewhere in Asia, please contact us at dubai@dezshira.com or visit us at www.dezshira.com. To subscribe for content products from the Middle East Briefing, please click here.
