Domestic Economy

Industries, Mines Leading Value Added Contributions

Industries, Mines Leading  Value Added ContributionsIndustries, Mines Leading  Value Added Contributions

Chairman of Tehran Chamber of Commerce, Industries, Mines and Agriculture, Masoud Khansari, referred to industrial development as “the cornerstone for economic development.”

Speaking at a ceremony to commend successful industrial and mineral enterprises, he said, “industrial and mining sectors play a pivotal role in augmenting value added and job creation,” said Khansari, observing that the sectors contributed 1.2% to the 3% economic growth reported by the Central Bank of Iran for the previous Iranian year (ended March 20), the Persian newspaper Ta’adol reported.

As per the CBI report, the industrial and mining sectors accounted for 1.2% and 16.5% of the country’s gross domestic product respectively in the previous Iranian year. The annual growth in value added by the mining and industrial sectors stood at 9.8% and 6.7% respectively.

Total value added by the industrial and mining sectors in the previous Iranian year was estimated at 362 trillion rials ($12.5 billion at current official exchange rate), indicating nearly 7% growth compared to the previous year.

  Prospect of Industrial Activities

Referring to the negative impact of declining oil prices over the past year on industrial activities, he anticipated a slow recovery in global industrial activities in the current year.

“Factors such as lower oil prices, the euro’s depreciation against the dollar, the slowdown in economic growth in China and other emerging economies as well as uncertainties about Europe’s economic and political conditions negatively affected industrial production in 2014,” Khansari pointed out.

“In 2015, industrial production is expected to remain low or decline in the developing and emerging countries, which is the main reason for readjustments in the global economic growth projections for the year,” he added.

  Growth in Industrial Exports

The TCCIM chairman referred to the narrowing gap between Iran’s import and export of industrial commodities as a positive achievement, observing that Iranian industries still have a long way to go to reach world class status.

“Industrial goods account for 20% of the country’s total exports. We must strive to maintain the upward pattern of industrial exports in the coming years,” said Khansari.

Observing that the level of industrial imports has steadily declined since 2009, he said it should be investigated whether the decline is due to growing self-sufficiency or due to the western sanctions imposed over Iran’s nuclear energy program and a downturn in domestic industrial activities.

  Private Sector Development

A proponent of free market economy, Khansari noted that private sector development is possible only through the “creation of a competitive environment which encourages entrepreneurship and private investment.”

He mentioned access to foreign technology and machinery following the removal of sanctions as instrumental for improving industrial production and exports.

“Improving macroeconomic conditions through stable inflation rates and balanced budget” was suggested as another factor that would encourage the private sector to invest and actively participate in industrial activities.