IRAN NEWS ECONOMIC DESK

TEHRAN – The caretaker of Majlis Research Center (IPRC) says all the reports and studies of the center which have been read in the open sessions of Majlis have been based on document, adding that the real per capita income has declined by one-third in the past nine years.

Speaking in the open session of Majlis, Mohammad Qasemi defended the report of the center on the current economic condition of the country, adding that all reports have been authentic and based on documents.

He said that as the Supreme Leader has said, economy is a decisive issue in the country which has faced managerial and structural weaknesses since the victory of the Islamic Revolution. He reiterated that all reports of the center are based on the logical economic patterns.

Qasemi noted that Iran’s economy in the past years has faced several structural challenges. He said in the country’s macro economy, the economy has always faced the downtrend growth rate, several fluctuations in the economic growth and the growth in dependence on oil, adding that while the economic growth target of the country has been set on 8 percent for the fifth and sixth development plans, the average economic growth of the country has been close to zero between 2012 and 2019 and during these years, country’s economic growth has been between minus 8.3 to plus 14 percent.

He said economic growth needs enough investment, adding that accumulation of capitals in oil, gas, industry, mines, construction and communications have been negative since 2012, adding that at the same time, the annual growth of these sectors was 3.5 percent on average in the past seven years before 2012.

On the inflation, he said the long-term average inflation rate of the national economy has been 20 percent, adding that most countries have resolved the issue of inflation while in Iran it is still a major problem and it actually has cut the real per capita income by one-thirds since 2011.

He reiterated that the government can be the first victim of the inflation and the rise in the government’s current expenditures can lead to the budget deficit.

Qasemi added that in several international economic indexes, the country’s condition has worsened, adding that the business environment in the country is also not satisfactory.

He reiterated that those mentioned problems are not limited to a certain government and all governments in the country have had their own weaknesses.

Qasemi noted that the current government will face at least with 185,000b tomans of budget deficit by the year end.

He added that as long as the banking system of the country is not reformed, problems cannot be solved by the government

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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.

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