<p>I admit I am piggybaking off of @Alex but hopefully adding some clarity with the charts and data provided in the answer.</p>
<p>First, we need to get some data:</p>
<ul>
<li><p><a href="https://unstats.un.org/unsd/snaama/Basic" rel="nofollow noreferrer">UN GDP</a></p>
</li>
<li><p><a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2020&amp;locations=IR&amp;start=2000&amp;year_high_desc=true" rel="nofollow noreferrer">WB GDP</a></p>
</li>
<li><p><a href="https://www.imf.org/en/Publications/WEO/weo-database/2022/April/weo-report?c=429,&amp;s=NGDPD,&amp;sy=2000&amp;ey=2020&amp;ssm=0&amp;scsm=1&amp;scc=0&amp;ssd=1&amp;ssc=0&amp;sic=0&amp;sort=country&amp;ds=.&amp;br=1" rel="nofollow noreferrer">IMF GDP</a></p>
</li>
<li><p><a href="https://data.worldbank.org/indicator/PA.NUS.FCRF?end=2021&amp;locations=IR&amp;start=2000" rel="nofollow noreferrer">Official FX Rate</a></p>
</li>
<li><p><a href="https://data.worldbank.org/indicator/PA.NUS.ATLS?end=2021&amp;locations=IR&amp;start=2000" rel="nofollow noreferrer">Alternative FX Rate</a></p>
</li>
</ul>
<p>I combined this in a <a href="https://julialang.org/" rel="nofollow noreferrer">Julia</a> DataFrame to obtain:</p>
<p><a href="https://i.sstatic.net/mOhGt.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/mOhGt.png" alt="enter image description here" /></a></p>
<p>Plotting GDP from all 3 sources shows the following:</p>
<p><a href="https://i.sstatic.net/ZKFhQ.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/ZKFhQ.png" alt="enter image description here" /></a></p>
<p>The IMF data is also more forward looking (includes forecasts, which were excluded here). The World Bank <a href="https://databank.worldbank.org/reports.aspx?source=2&amp;type=metadata&amp;series=NY.GDP.MKTP.CD" rel="nofollow noreferrer">metadata</a> offers some interesting insight:</p>
<blockquote>
<p>... different countries use different definitions, methods, and
standards. World Bank staff review the quality of national accounts
data and sometimes make adjustments to improve consistency with
international guidelines. Nevertheless, significant discrepancies
remain between international standards and actual practice. Many
statistical offices, especially those in developing countries, face
severe limitations in the resources, time, training, and budgets
required to produce reliable and comprehensive series of national
accounts statistics.</p>
</blockquote>
<p>You can find some more details in <a href="https://economics.stackexchange.com/a/51620/37817">this answer</a>. For example, the UK <a href="https://www.ft.com/content/65704ba0-e730-11e3-88be-00144feabdc0" rel="nofollow noreferrer">&quot;quickly&quot; added</a> £10 billion to GDP by accounting for illegal drugs and prostitution. This is still nothing compared to Nigeria, which literally <a href="https://hbr.org/2014/04/nigerias-gdp-just-doubled-on-paper-what-it-means-in-practice#:%7E:text=Earlier%20this%20week%2C%20Nigeria%20ascended,%24510bn%20from%20%24270bn." rel="nofollow noreferrer">doubled</a> its GDP over night.</p>
<p>Nonetheless, as already suggested, it is mainly the difference in FX rates that causes the results to be so different in this case:</p>
<p><a href="https://i.sstatic.net/MPegb.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/MPegb.png" alt="enter image description here" /></a></p>
<p>We can convert the UN Figure to the shadow FX rate via this line</p>
<pre><code>df[!, &quot;UN Inofficial GDP&quot;] =  df[!,&quot;UN GDP&quot;]./df[!,&quot;inofficial&quot;].*df[!,&quot;official&quot;]
</code></pre>
<p>Plotting UN and WB GDP data looks like this now (IMF is practically identical to UN so I omitted it):</p>
<p><a href="https://i.sstatic.net/AW63o.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/AW63o.png" alt="enter image description here" /></a></p>
<p>With regards to which series is more accurate - WB would be a more sensible choice. The official rate is kept artificially high. The effect is similar to Real vs Nominal GDP. The actual value that matters is the productive capacity. With high inflation, prices rise, and even if real productivity declines, as long as prices rise more, nominal GDP increases. That is what you observe in the GDP values using the official exchange rates as well. It makes it look as if GDP almost doubled since 2017, when in fact productivity declined.</p>
<p>Last but not least, it is difficult to get accurate numbers in circumstances like these. There may even be a large amount of unreported informal economic activity with barter or goods being consumed within the household (e.g. agriculture). This would in turn underestimate GDP, but to be honest, I have no experience with developing countries national accounting, and as such, this is a purely speculative addition.</p>

CC BY-SA 4.0
2022-09-08T21:38:23.887Z
Thanks for the efforts to get data and generating the graphs! It does make things much clearer- of course as you said, due credit should be given to @Alex.
whoisit
CC BY-SA 4.0
2022-09-05T19:01:33.150Z
2022-09-05T19:01:33.150Z
AKdemy
<p>Wikipedia has 3 widely different estimates of Iran's GDP: 1.7 Trillion, 1 Trillion and a quarter Trillion. <br />
All three come from well-known institutes (IMF, UN and WB) - so this doesn't seem to be hand-wavy.<br />
(Source: <a href="https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)</a> )</p>
<p>My question is, why do these estimates vary so much specifically for Iran, and not for other nations including China, Russia? And what would be the most accurate estimate of Iran's GDP?</p>

CC BY-SA 4.0
2022-08-31T22:14:25.307Z
I assume you read the note next to 1.7trillion?
Alex
CC BY-SA 4.0
2022-08-31T22:28:05.483Z
UN applies the following: "Data in current prices in US Dollars are converted from data in current prices in national currency using annual period-average exchange rates."
Alex
CC BY-SA 4.0
2022-08-31T22:31:47.787Z
The world Bank approach is the following: "where the official exchange rate does not reflect the rate effectively applied to actual foreign exchange transactions, an alternative conversion factor is used."
Alex
CC BY-SA 4.0
2022-08-31T22:41:50.653Z
World Bank and UN were very similar in 2015 but since the official exchange rate and shadow exchange rate diverged so much, you end up with such large differences.
Alex
CC BY-SA 4.0
2022-08-31T22:47:41.050Z
https://data.worldbank.org/indicator/PA.NUS.ATLS?locations=IR&start=2016 you can swap between official and alternative LCU vs USD. 42000 vs ~184000. Take this into account and the quarter trillion becomes ~ a trillion, in line with the UN measure again. IMF is a 2022 forecast based on official rates as well (as seen in the note next to the 1.7 and as such also inflated).
Alex
CC BY-SA 4.0
2022-09-05T13:36:04.317Z
@Alex Yes, I did read the note. But I did not know if that was the only factor contributing to the difference - so thanks for the world bank link. Also, this FX rate issue seems unique to Iran. I presume it is the result of US sanctions? Also, does this mean the WB estimate would be the more accurate representation?
whoisit
<gdp><imf>
What would be the most accurate estimate of Iran's GDP?
whoisit
# What would be the most accurate estimate of Iran's GDP?

(Asked by: username_0 on 2022-08-31)

Wikipedia has 3 widely different estimates of Iran's GDP: 1.7 Trillion, 1 Trillion and a quarter Trillion.   
All three come from well-known institutes (IMF, UN and WB) - so this doesn't seem to be hand-wavy.  
(Source: <https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)> )

My question is, why do these estimates vary so much specifically for Iran, and not for other nations including China, Russia? And what would be the most accurate estimate of Iran's GDP?

**Tags:** gdp, imf
> **Comments:**
> **username_1**: I assume you read the note next to 1.7trillion?  
> **username_1**: UN applies the following: "Data in current prices in US Dollars are converted from data in current prices in national currency using annual period-average exchange rates."  
> **username_1**: The world Bank approach is the following: "where the official exchange rate does not reflect the rate effectively applied to actual foreign exchange transactions, an alternative conversion factor is used."  
> **username_1**: World Bank and UN were very similar in 2015 but since the official exchange rate and shadow exchange rate diverged so much, you end up with such large differences.  
> **username_1**: https://data.worldbank.org/indicator/PA.NUS.ATLS?locations=IR&start=2016 you can swap between official and alternative LCU vs USD. 42000 vs ~184000. Take this into account and the quarter trillion becomes ~ a trillion, in line with the UN measure again. IMF is a 2022 forecast based on official rates as well (as seen in the note next to the 1.7 and as such also inflated).  
> **username_0**: @Alex Yes, I did read the note. But I did not know if that was the only factor contributing to the difference - so thanks for the world bank link. Also, this FX rate issue seems unique to Iran. I presume it is the result of US sanctions? Also, does this mean the WB estimate would be the more accurate representation?  

---

## 1 answers

### Answer by username_2 on 2022-09-05. Score: 3 | Accepted answer

I admit I am piggybaking off of @Alex but hopefully adding some clarity with the charts and data provided in the answer.
First, we need to get some data:

UN GDP

WB GDP

IMF GDP

Official FX Rate

Alternative FX Rate


I combined this in a Julia DataFrame to obtain:

Plotting GDP from all 3 sources shows the following:

The IMF data is also more forward looking (includes forecasts, which were excluded here). The World Bank metadata offers some interesting insight:

... different countries use different definitions, methods, and
standards. World Bank staff review the quality of national accounts
data and sometimes make adjustments to improve consistency with
international guidelines. Nevertheless, significant discrepancies
remain between international standards and actual practice. Many
statistical offices, especially those in developing countries, face
severe limitations in the resources, time, training, and budgets
required to produce reliable and comprehensive series of national
accounts statistics.

You can find some more details in this answer. For example, the UK "quickly" added £10 billion to GDP by accounting for illegal drugs and prostitution. This is still nothing compared to Nigeria, which literally doubled its GDP over night.
Nonetheless, as already suggested, it is mainly the difference in FX rates that causes the results to be so different in this case:

We can convert the UN Figure to the shadow FX rate via this line
df[!, "UN Inofficial GDP"] =  df[!,"UN GDP"]./df[!,"inofficial"].*df[!,"official"]

Plotting UN and WB GDP data looks like this now (IMF is practically identical to UN so I omitted it):

With regards to which series is more accurate - WB would be a more sensible choice. The official rate is kept artificially high. The effect is similar to Real vs Nominal GDP. The actual value that matters is the productive capacity. With high inflation, prices rise, and even if real productivity declines, as long as prices rise more, nominal GDP increases. That is what you observe in the GDP values using the official exchange rates as well. It makes it look as if GDP almost doubled since 2017, when in fact productivity declined.
Last but not least, it is difficult to get accurate numbers in circumstances like these. There may even be a large amount of unreported informal economic activity with barter or goods being consumed within the household (e.g. agriculture). This would in turn underestimate GDP, but to be honest, I have no experience with developing countries national accounting, and as such, this is a purely speculative addition.

> **Comments:**
> **username_0**: Thanks for the efforts to get data and generating the graphs! It does make things much clearer- of course as you said, due credit should be given to @Alex.  

---

