Rouhani’s economic team recall the prior financial year as one the severest years in running the country. Now the question is how this difficult year was passed through and what its most important economic bench marks were. Following you can observe some of the economic indices made available by their publishers in Iran.
Economy of Iran
The economy, which had exited the recession after 8 seasons of contraction and stepped back to growth path in 2014/15, resumed its negative growth from the autumn of the year 2015/16 with the start of declining oil prices.
Oil share of the global market
In order to take a larger share of the oil market, the exportation of the oil rose more than 12% in summer and autumn seasons of the prior Persian calendar compared to the corresponding period in the prior year. This figure stood at 1,550,000 barrels per day. Worryingly, this spike in the production ended up in lower oil prices worldwide in the same period.
According to the data compiled by the Statistics Center of Iran (SCI), the Gross Domestic Product (GDP) of Iran in the period equaled 1.0 %. This was 0.9% excluding oil sales.
Agricultural Sector Growth
This sector’s contribution to the GDP was not significant, on balance, in the years before, but it witnessed 5.4% growth in the period, underlining its considerable share of the overall economic growth in the country.
Unemployment Rate Going up
More than 664,000 people were employed in the period. But as about 883,000 people were added to the number of active population, the unemployment rate surged up to 11%. Furthermore, 23.3% of individuals in the 15-29 age-group are jobless, which is not good news for the authorities.
Oil Income & Budget
Proceeds from oil and oil products went down by 10 % in the eleven months into FY 2015/16, compared with the same period the year before. In spite of 6.16% decrease in civil projects expenditures by Rouhani’s administration in the period, his government still encountered with 6.115% rise in budget deficit.
The advance in tax incomes in the eleven months into FY 2015/16 by 7.2% while inflation rate moving up by around 11.9% indicates drop in the actual value of the collected tax incomes by the government.
Considering the total percentage of the firms’ divestments by the Privatization Organization of Iran, which started in 2001, just 1.9% were divested in 2015/16.
Money supply grew by 30% compared with the prior year and reached IRR 10,171tr ($293 bn at market exchange rate).
Unlicensed Credit & Financial Institutions
It is estimated that these unlicensed institutions own approximately 20% of the liquidity in the economy. Less than 10 institutions from 6,000 unauthorized ones possess one fifth of the total money stock.
Increase in Bank Deposits
According to the stats released by the Central Bank of Iran, rial and foreign currency balance of banks and credit institutions in the Q3, 2015/16 stood at IRR 9,914 tn ($285.7 bn, at market exchange rate), which shows a 21% rise compared with the same period the year before and 26.4% in comparison with FY 2014/15.
Lackluster in Housing & Construction Sector
The prolonged recession in housing sector and the fall in expenditures in civil projects by the government led to the sector nose-diving by 16.4% in added value.
Industry sector slump
Based on the Central bank of Iran’s figures, the large industrial workshops production index faced with 9.1% reduction in Q3, 2015/16.
To figure out the major causes of difficulty in doing business in Iran, the seasonal report by Parliament Research Center has found out two underlying key facts. The study has been conducted over 271 economic enterprises across the country. Employing 21 indexes in the domestic business environment of Small and Medium Sized Enterprises (SMEs) in the prior Iranian year, there were two of them standing out.
First was banks failing to fund these entities with their resources due to many reasons. Second was the undeveloped capital market of Iran lacking a specific market dedicated to financing these small businesses.
However, these issues have been properly addressed by the relevant authorities of these two in the current year. This is eased by the issuance of a mandate encouraging big lenders to lend money to SMEs and the imminent opening of a market in Iran Fara Bourse meant to raise fund for such businesses.