Domestic Economy

Leaving Recession Behind

Leaving Recession Behind
Leaving Recession Behind

The current rate of economic growth indicates that recession is coming to an end, said the general manager of Economic Statistics Bureau in Central Bank of Iran (CBI), Ali Moghtadayee on Tuesday, adding that “the CBI is expecting the 4 percent growth rate - recorded in the first half of the current Iranian year (to end March 20, 2015) - to continue over the second half of the current fiscal year.”

“What matters most in the current economic situation is that recession is getting over and the economy has started to grow,” Moghtadayee remarked, expressing hope that the economy will continue to grow in the months to come.

The CBI official referred to the connection between lowering inflation rate and enhancing the economic growth saying: “Lowering the inflation rate results in economic stability, which is a prerequisite for economic growth. The government has achieved its goal of ending recession by stabilizing the economy and restoring trust in the market. One could say that stable economic growth is only possible in a stable economic environment.”

The CBI is forecasting that the inflation rate will be less than 20 percent by the end of the current fiscal year but the actual inflation rate depends on what happens within the next month, Moghtadaee said.

Meanwhile, Jafar Qaderi, a member of parliament and Budget and Planning Parliamentary Committee – noted that since economic growth rate is an annual indicator, measuring growth rates based on six-month performance “cannot be a reliable.”

“Data published by the CBI about economic growth must represent a tangible change in the economy or otherwise people will not trust it,” he added.

While acknowledging that the 4 percent growth in Iran’s economy – which he assumed is a result of the increase in oil and car manufacturing revenues – is “a correct estimate since it was announced by both President Rouhani and the CBI”, the MP insisted that “this growth rate does not necessarily represent a tangible and comprehensive improvement in economic production.”

He further explained that since there has been no “outstanding improvement” in economic indicators such as industrial manufacturing, exports, unemployment rate, etc. “people do not actually feel the economic growth that the government is talking about.”