Reza Ghiabi
Economic analysis usually deals with two familiar states: growth or recession. Iran’s current condition, however, fits neither category. What is increasingly observable is an intermediate and persistent state that can best be described as an “economy of waiting.”
In this economy, a large share of households and businesses neither make major decisions nor invest, yet they remain economically active. This condition has itself become an independent economic variable.
In an economy of waiting, activity does not stop, but it loses direction. People work, firms continue operating and markets remain open, but key decisions are postponed. This postponement is not driven by indifference or inertia; it is rooted in chronic uncertainty.
Official data support this picture. Over the past decade, gross fixed capital formation in Iran has followed a sluggish trend.
According to figures released by the Statistical Center of Iran and the Central Bank, the ratio of investment to GDP—which exceeded 30% in the 2000s—has in recent years fallen to around 20% or even lower. In practical terms, this means the economy is consuming past capacities rather than building for the future.
At the micro level, the signals are equally clear. The share of demand deposits and short-term savings in total liquidity has increased, while long-term household investments—in areas such as housing, small businesses or specialized education—have declined.
Many households prefer to remain liquid, even though liquidity rapidly loses value under high inflation. Preserving optionality has taken precedence over committing resources.
The labor market also reflects this economy of waiting. Official unemployment rates may not show dramatic changes, but indicators such as job mobility, new entrepreneurship and startup formation have weakened.
People are employed, but effectively “on hold.” Jobs are maintained not as a platform for advancement, but as a means of risk minimization.
Rational Strategy
Under high uncertainty, waiting becomes a rational strategy. When policy horizons, exchange rates, market access or even basic business rules are unpredictable, decision-making turns costly. In such an environment, both individuals and firms benefit from delaying irreversible commitments.
From the perspective of economic theory, opportunity costs behave differently in an economy of waiting. The cost of making decisions rises, while the cost of not deciding falls.
The outcome is a slowdown in the circulation of decisions—a phenomenon that directly undermines productivity, even if nominal output is preserved.
The economy of waiting has several clear macroeconomic implications. First, it lowers potential growth. When investment is postponed today, future growth is effectively forfeited.
Second, it erodes human capital. Skilled workers either migrate or shift into activities unrelated to their expertise. Third, it encourages short-term behavior. Instead of pursuing development strategies, firms adopt survival tactics: cost-cutting, downsizing or moving into non-productive activities.
Is There a Way Out?
An economy of waiting cannot be eliminated by slogans, nor is it necessarily resolved through liquidity injections. The primary exit strategy lies in reducing the range of uncertainty—rather than attempting to eliminate it altogether.
At the policy level, even small but credible and sustained measures can lower decision-making costs: relative stability in tax rules, predictability in business regulations or the announcement of believable medium-term plans. The economy needs predictability more than “good news.”
At the firm level, staged investments, small and reversible projects and collaborative partnerships can substitute for large, high-risk decisions. These are not ideal solutions, but they are adaptive tools suited to an economy of waiting.
Ultimately, the economy of waiting is not a sign of social stagnation. It reflects rational behavior shaped by uncertainty.
Yet its persistence carries cumulative costs that gradually manifest in low growth, human capital depletion and declining competitiveness.
Recognizing the economy of waiting is the first step toward exiting it—not through rushed decisions, but by restoring a minimum level of predictability to the economic lives of households and businesses.
This article was first published in Farsi by Donya-e Eqtesad daily.
