IPRC Forecasts 20 to 25 Percent Inflation for Next Year

IRAN NEWS ECONOMIC DESK

TEHRAN – Majlis Research Center (IPRC) in its latest report has warned the current economic environment and called for reform in financial environment which is a major concern for the business in the country.

The IPRC in its report, which analyzed the general view of national economy for the current year and forecasting the prospect for the next year, has claimed the inflation rate for next Iranian calendar year would be between 20 to 25 percent.

It further says according to the latest signs from the economic performance in the first half of the current year and analyzing events by the yearend, Iran’s economy is forecasted to grow by 18 percent by the yearend without oil while the growth in the agro sector will be 5.5 percent, in industry 1.5 percent, in gas, electricity and water 10 percent, in construction 14.5 percent and 1.5 percent in services.

The report notes that on the whole, although the economic growth rate is expected to be lower than last year but the condition in non-oil sector is by far much better than last year. It reiterates that negative growth in oil sector is the main reason for fall in the total economic growth rate.

The IPRC reiterated that because of the sanctions on oil sector, it seems Iran’s economy next year would jump out of negative zone.

On the occupation and unemployment, the report says 850,000 people have joined the employment wagon this summer and the unemployment rate in spring and summer was downward at 10.8 and 10.5 percent respectively.

The report also admits increase in the number of unemployed educated youth joining the job market has made the condition worrying for next year.

It also noted that a research and interviews with economic activists in the country show that they are unhappy with improper financial environment and called it the biggest problem for business environment in the country. They have warned as long as the financial system is not reformed, the condition will not improve, the report claimed.

The report also pointed to the trend for increase in inflation rate last year and in the first half of the current year which caused the inflation rate to reach 43 percent in September.

It also predicts the average inflation rate to be 35 percent by the yearend and if this condition remains stable, the average inflation rate for next year will be between 20 to 25 percent.

The report reiterated if the government decides to increase the taxes to cover its budget deficit, the inflation rate will soar more next year.