TEHRAN (Iran News) Data published by the Iran Chamber of Commerce’s Research Center indicates that the overall economic PMI for May, after adjusting for seasonal effects, stalled at a neutral 50.3—barely above contraction territory. Meanwhile, the industrial PMI slipped to 46.3, marking its lowest reading in 10 months since August 2024 and confirming growing signs of recession in the country’s manufacturing sector.

Expectations for economic improvement in May were dashed by a combination of worsening structural problems. Recurring power outages emerged as one of the most disruptive forces affecting industrial production. Paired with shrinking inventories of raw materials, rising production costs, and tight liquidity, producers found themselves unable to meet demand or maintain previous output levels.

Additional pressure came from a decline in consumer purchasing power due to persistent inflation and currency volatility, which in turn depressed domestic demand and exports. Many producers reported reduced sales and a sharp drop in new customer orders, with May being the sixth consecutive month of declining orders.

These combined stressors translated into job losses and hiring freezes in the industrial sector. Companies, burdened by uncertain economic and political outlooks, have been reluctant to expand operations or hire new workers, reflecting broader anxieties about the future.

Among the five main components of the PMI, four posted declines: production levels, new customer orders, delivery speed, and raw material inventories. The only component that remained stable was delivery speed, holding at the neutral threshold of 50.

Industrial output in May was recorded at 44.3, its lowest point in five months. The drop was largely attributed to ongoing electricity shortages, which disrupted operations at production facilities nationwide. Currency fluctuations exacerbated the situation by driving up the cost of imported materials and making pricing strategies increasingly unpredictable.

The weakness in consumer demand has also taken a toll. As inflation accelerates and wages fail to keep pace, purchasing power has eroded, causing domestic orders to fall and forcing companies to scale back production accordingly.

Iran’s export performance also deteriorated in May. The export sub-index reached its lowest point in 54 months—dating back to December 2020. Exporters cited regulatory hurdles such as complex foreign exchange clearance requirements and fluctuating exchange rates as key barriers. These issues have led to unpredictable pricing, declining profit margins, and weakening competitiveness in international markets.

Simultaneously, imports of raw materials have suffered due to delayed currency allocations and complex customs clearance procedures. For the fifteenth consecutive month, businesses reported shrinking inventories of purchased materials, compounding production delays and increasing costs.

Final product inventories continued their decline for a seventh straight month, indicating that companies are wary of stockpiling due to low demand and limited cash flow. Power outages and production cost spikes further discouraged manufacturers from maintaining normal inventory levels.

Employment indicators were equally grim. The rate of hiring in the industrial sector reached its lowest level since early 2019. This was attributed to a triple blow of energy shortages, high inflation, and sluggish order volumes. Business leaders said political uncertainty had made long-term staffing decisions nearly impossible, while stagnant wages were failing to attract or retain skilled labor.

Looking ahead, optimism among manufacturers has hit a near five-year low. May saw the second-lowest expectation reading for future output since October 2020. Many firms expect further deterioration in June, citing unresolved energy issues, logistical bottlenecks, and the ongoing lack of clarity surrounding political negotiations.

Economic stakeholders also reported that supply chain disruptions—including transportation and customs delays—would likely spill into June, prolonging the challenges faced by producers. Some believe next month could see even more severe conditions.

Business leaders identified several core issues plaguing the economy: Power outages: Frequent blackouts during the workweek crippled industrial output and disrupted operations; Limited demand: Even businesses equipped with generators were unable to sustain meaningful production due to poor sales; Currency fluctuations: Sharp swings in exchange rates caused pricing headaches, particularly for exporters who had procured expensive materials earlier and now face slimmer margins due to lower selling prices; Downstream caution: In light of market uncertainty, downstream industries have adopted a wait-and-see approach, further reducing demand; Supply chain delays: Transport and customs-related setbacks continue to hinder operations and are expected to worsen in June; Material shortages: Scarcity of key raw materials due to import barriers and price hikes has limited factory output; and shrinking consumer demand: High inflation has weakened purchasing power, reducing demand and forcing firms to adjust their production schedules accordingly.

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TEHRAN (Iran News) Speaking at the “Market-Oriented” seminar held alongside the first INOX-FINEX exhibition in Mashhad, Ghaninejad said, “In the current climate, Iranian producers are facing major hurdles because prices must be set by regulators. At the same time, they struggle to secure financing from banks due to interest rates and deposit rates being dictated by the government.”

He likened the financial sector to the nervous system of the economy, explaining, “If the physiology of Iran’s economy is dysfunctional, improving its ‘neurology’ won’t resolve anything.”

According to Ghaninejad, economic issues must be addressed within their proper framework. He warned that excessive financialization leads to price bubbles, destabilizing the market.

Reflecting on the early 2000s, he pointed to the relative success of private banks during that period, attributing their performance to a lack of price-setting regulations. However, he noted that with the onset of state-imposed pricing in 2005, the banking system began experiencing persistent problems that continue today.

He also identified credit institutions as a key driver of inflation, adding, “Wherever the government makes poor policy decisions, corruption and resource misallocation inevitably follow.”

On the topic of Iran-U.S. nuclear negotiations, Ghaninejad emphasized that even if a deal is reached, without broader economic reforms and liberalization, issues like investment uncertainty and poor economic predictability will remain unresolved.

He concluded by calling for a comprehensive release of the economy from state domination and excessive regulatory control.

In the same seminar, economist Farhad Nili provided a mid-term outlook on Iran’s macroeconomic future, cautioning that even domestic economic reforms could fall short if not supported by long-term planning. “Without a strategic vision, the main casualty of reform will be economic growth,” he said.

Nili stressed the importance of political capital in carrying out successful reforms. “Reform leaders need enough political backing to implement short-term measures and stay the course in pursuit of long-term goals,” he said.

He acknowledged that any potential agreement between Iran and the United States would come with restrictions. “If we fail to use the external environment as a platform for economic planning and consensus-building, we’ll lose the only driver of meaningful reform,” he warned.

According to Nili, the potential Iran-U.S. deal would likely allow the sale of only 1.7 million barrels of oil per day, a limit that falls short of providing transformative change. “Domestic reports about these negotiations suggest minimal change in outcomes, even in the event of a deal. Long-term economic gains remain elusive,” he added.

He argued that Iran needs more internal coordination than external negotiation. “The Foreign Ministry should be negotiating with the Ministry of Economy—because without domestic agreement and coherent policy, reform efforts may fail. We cannot place the entire future of Iran’s economy on foreign relations alone.”

Nili concluded, “What will improve our situation is real economic growth—lower interest rates, healthier businesses, less currency shock, and a shift from an unstable to a stable economic environment. Inflation must come down, and investors need to believe in a predictable future.”

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TEHRAN (Iran News) Mehrpourian highlighted that Iranian private companies have struggled to make significant economic inroads in Venezuela. A key factor is the political landscape, where Venezuela’s private sector is often associated with the opposition. However, the Venezuelan government is working to alter this perception and encourage more private-sector engagement.

Despite the challenges, Iranian knowledge-based companies have significant potential in Venezuela. Opportunities exist in IT infrastructure, telecommunications, oil and petrochemicals, and refinery modernization. Additionally, Venezuelans have shown a strong interest in Iranian medical services, particularly in laboratory diagnostics.

Mehrpourian stated that agreements and memorandums of understanding have been signed, ensuring legal frameworks for collaboration. However, the real test lies in execution. Some Iranian private firms have begun independent marketing efforts in Venezuela, targeting exports in fiber optics, mining, and petrochemicals. Yet, financial returns remain modest due to Venezuela’s weak economy and low purchasing power.

Trade between Iran and Venezuela faces economic hurdles. Iran does not import Venezuelan goods, as the overall standard of living in Iran is higher. Venezuela mainly relies on raw material exports, such as coffee, cocoa, and timber, with Russia and the UAE being key buyers. While Venezuela once had substantial gold reserves, these have diminished. The remaining reserves are of lower purity, reducing their value. Due to liquidity issues, the Venezuelan government often pays foreign contractors in gold rather than cash.

Venezuela, with a population of approximately 29 million, has seen an exodus of its wealthy citizens, further weakening its economy. While the country is rich in untapped mineral resources, fertile agricultural land, and water resources, the local population lacks the infrastructure and inclination for large-scale production. Consequently, Iranian investors see potential in the country, but logistical challenges, including high trade costs due to geographical distance, hinder profitability. Proximity to the U.S. and Spain allows American and European products to dominate the Venezuelan market, reducing the competitiveness of Iranian goods.

Iranian investors have explored offshore farming in Venezuela and have secured land for agricultural production. However, implementation remains in the early stages due to inadequate water supply and infrastructure development. No significant agricultural output has yet been realized.

One of the most visible aspects of Iran-Venezuela trade relations is the presence of Iranian automobiles. Since the administration of former Iranian President Mahmoud Ahmadinejad, Iran Khodro and SAIPA have operated assembly plants in Venezuela. These companies continue to function on a CKD (Completely Knocked Down) basis, assembling Iranian car parts locally.

While economic engagement between the two nations is growing, structural and logistical challenges persist, limiting the full potential of trade expansion. Iranian businesses remain cautiously optimistic about future prospects, contingent on overcoming economic and infrastructural barriers.

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TEHRAN (Iran News)  In its latest report, the IMF said that inflation in Iran will decrease to 31.7% this year, dropping 5.8 percentage points from earlier estimates made in April.

It also projected Iran’s economic growth to reach 3.7% this year, up from a previous estimate of 3.3%.

Despite fluctuations in oil production, the IMF expects economic growth in Iran to continue, driven by the expansion of the services and industrial sectors.

Furthermore, the IMF predicts that inflation in Iran will drop to 29.5% next year, suggesting that the government’s current goal of reducing inflation to below 30% may be achievable.

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TEHRAN (Iran News) Abolfazl Kudehi was appointed as head of the Organization for Investment Economic and Technical Assistance of Iran (OIETAI) on Tuesday.

Kudehi’s appointment decree was signed by finance minister Abdonnaser Hemmati.

He has served for several years as head of the Office for Foreign Investment at the OIETAI and replaces Ali Fekri who had led the organization since October 2021.

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“In order to increase economic exchanges, it is proposed to establish a joint bank to support economic activities so that businessmen on both sides can interact with local currencies of lira and rial,” Kashefi said in the meeting.

As reported by the portal of the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), implementation of a free trade agreement and the reduction and elimination of customs tariffs were also among the issues discussed by the two sides.

Speaking in the gathering, Kashefi pointed to the above-mentioned issues as the requirements for the development of economic relations between Iran and Syria.

According to the official, promoting profitable trade and increasing economic exchanges between Iran and Syria are among the major goals of his visit to the Arab country.

Further in the meeting, Syrian economic and trade officials stressed their interest in increasing cooperation with the Islamic Republic of Iran and proposed ways to develop the two countries’ trade relations.

Iran and Syria have been taking major steps for the expansion of their mutual trade ties. The two sides have exchanged numerous trade delegations and Iranian private companies are investing in various fields of the Syrian economy like providing construction materials especially cement and working on several reconstruction projects.

Back in 2020, Kashefi had said that the value of Iran’s trade with Syria could reach $1 billion by the next Iranian calendar year 1400 (starts on March 21).

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Oil was also supported as U.S. stock markets hit record highs on signs of progress towards the more economic stimulus, while a closely watched jobs report confirmed the labor market was stabilizing.

U.S. employment growth rebounded moderately in January and job losses in the prior month were deeper than initially thought, underscoring an urgent need for additional relief money from the government. President Joe Biden’s drive to enact a $1.9 trillion coronavirus aid bill gained momentum on Friday.

Brent crude settled 0.85% higher at $59.34 per barrel. U.S. West Texas Intermediate crude settled 1.1% higher at $56.85 per barrel. The contract hit its highest level since Jan. 22 and posted its best week since October.

“Brent is eyeing the $60 level now that OPEC+ has successfully eased most supply-side concerns and optimism on the COVID front improves globally,” said Edward Moya, senior market analyst at OANDA in New York.

“The fundamentals remain solid for crude, but a consolidation seems likely given the recent runup.”

Brent is on track to rise more than 6% this week. The last time it traded at $60 a barrel, the pandemic had yet to take hold, economies were open and people were free to travel, meaning demand for gasoline, diesel, and jet fuel were much higher.

The rollout of COVID-19 vaccines, however, is fuelling hopes of lockdowns being eased, boosting fuel demand. But even demand optimists such as OPEC do not expect oil consumption to return to pre-pandemic levels until 2022.

“What is really helping the market today, and is a more valid reason for the price rise we see, once again comes from Saudi Arabia and its top firm, Aramco,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.

Aramco raised its Arab Light official selling price (OSP) to Northwest Europe by $1.40 a barrel from the previous month. The move could be a signal that Saudi Arabia is more confident in the outlook for oil demand, which is fueling bullish sentiment in the market, Tonhaugen said.

Oil also gained support from supply curbs by producers. OPEC and its allies, collectively known as OPEC+, stuck to their supply tightening policy at a meeting on Wednesday. Record OPEC+ cuts have helped to lift prices from historic lows last year.

“OPEC+ discipline has been a real positive,” said Michael McCarthy, chief market strategist at CMC Markets.

Further boosting the market, a weekly supply report showed a drop in U.S. crude inventories to their lowest since March, suggesting that output cuts by OPEC+ producers are having the desired effect.

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IRAN NEWS ECONOMIC DESK

TEHRAN – According to the statistics released by Tehran Chamber of Commerce, Industry, Mine and Agriculture (TCCIMA), Iran’s trade with Eurasian Economic Union (EAEU) countries stood at around $1.4b in the first 8 months in the current Iranian calendar year.

According to the report, the value of Iran’s trade of goods with EAEU states, excluding the crude oil trade, has been around $1.4b in the first eight months of the current Iranian calendar year which accounts for 2.8 percent of the total value of Iran’s trading goods and the figure shows 11 percent decline comparing to the same period last year.

The report shows that in the first eight months, Iran has exported 1.8m tons of non-oil goods worth $639m to the EAEU member states that shows 20 percent decline in terms of weight and 6 percent in terms of value comparing to the same period last year. TCCIMA report also indicates that Iran’s exports to Russia and Belarus have increased considerably in terms of weight and value while its exports to three countries of Armenia, Kazakhstan and Kyrgyzstan have slumped both in terms of weight and value.

EAEU states’ share of Iran’s total goods exports in the first eight months has not witnessed a meaningful change both in terms of weight and value comparing to the same period last year and with only 0.2 percent rise has reached 2.4 percent.

Among Iran’s trade partner in the EAEU, Iran’s exports to Russia in the first eight months have stood at $285m while the figure has been $233m for Armenia and in return Iran has had most of its imports from Russia which is valued at $727m.

Agro and foodstuff items have accounted for major part from Iran’s total exports to five EAEU member states in the eight months which has been around 425m tons of goods worth $330m. The major destinations for Iran’s food and agro exports to the EAEU states have been Russia, Kazakhstan and Armenia. The figure for exports to Russia is some $246m, to Kazakhstan $44m and to Armenia $23.6m.

Meanwhile the report claims that Iran’s trade balance with EAEU members in the current Iranian calendar year has been negative but the condition has become better in favor of Iran as the negative trade balance has been cut by $90m. The reason for this cut in the negative trade balance is the rise in exports from and decline of imports from Russia and Belarus, and also because of decline in imports from Kazakhstan.

The report also indicates that the trade balance with Russia in the first eight months is still negative with $442m in favor of Russia.

Eurasian Economic Union (EAEU) as an economic union which has started its work since 2015 with five major countries of Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia and it is in charge of policy-making for macro economy, migration of workforce in direction of free trade and trade agreements.

Iran signed a trade agreement with EAEU in November 2019 and according to the agreement, 860 items of goods are traded between Iran and five EAEU members and Iran is currently negotiating for signing free trade agreement with the union.

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TEHRAN (IP)- The Minister of Economic Affairs and Finance says “We must seek to create security for investment and the private sector in the implementation of communicative policies and laws of the parliament.”

IRAN NEWS ECONOMIC DESK

Farhad Dejpsand in the open session of Majlis and responding lawmaker’s questions said: “Iran’s economy is facing a fundamental and structural challenge regarding the bulky structure of the government.”

According to him, the size of the government, as it prevents the proper and optimal allocation of resources, will have direct and rapid effects on the efficiency of the economy.

Dejpsand continued: “Since the 1980s, the late Imam Khomeini (RH) emphasized on handing over affairs to the people, and since 1984, with the announcement of the policies of Article 44 of the Constitution by the Supreme Leader of the Revolution, these emphases have increased day by day.”

He reminded: “The Leader of the Revolution, after five years of this communiqué, re-emphasized it because this is one of the basic priorities of the system.”

The Minister of Economic Affairs and Finance emphasized: “Privatization is a serious approach, privatization is not to finance the government but to improve the relationship between the government and the market in the economy and is an inevitable necessity.”

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IRAN NEWS ECONOMIC DESK

TEHRAN – Minister of Industry, Mine and Trade believes the national security depends on economic power and announced the readiness of the ministry for arrival of the big and capable companies into the social responsibilities.

Addressing the 5th International Conference of Industrial Management on Monday, Alireza Razm Hosseini pointed to the root culture of development, saying that type of approach of officials and executives in the country regarding the issue of development is effective in the all-out growth of the country.

He emphasized the attention to the update indicators of the world in the field of development, stipulating that the approach of officials and executives for reaching development, progress and development should be drastically changed, noting that the emphasis of the Holy Islam in the very field of development underscores this point.

Razm Hossein said that national security depends on economic power, adding that economic power depends on the inflation rate, growth of per capita production, and fair distribution of wealth among the people, adding that that fair distribution of wealth in fact indicates equal opportunities for generating the wealth and job.

He also said indicators of life expectancy, amount of cultural production, social security, providing infrastructures, communications and communication networks, and food security are of the other parameters for attaining economic power.

The minister also said that economic power will lead to protection of social and human assets, elites, public satisfaction and playing more roles in the region and the world.

Razm Hosseini added that the country has provided good infrastructures and to this end, the country should make the most of its human and social assets, and economic growth should be dynamic and to this end, the approaches should be changed.

He also urged the organizers of the conference to put on its agenda for its next session the Supreme Leader’s Statement on the Second Step of the Revolution.

The minister noted that the company is to take advantage of capacities and capabilities of 200 famous and successful companies for balanced development in the county and it is on the agenda.

Razm Hosseini reiterated that people’s livelihood is the priority of his ministry and it works for abundant distribution of goods in the market.

He said in recent months in the production sector, the country has witnessed growth in production of some commodities like home appliances and vehicles.

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