Economy, Domestic Economy

Invisible Growth

Invisible GrowthInvisible Growth

Iran’s economy continued to grow for the second season during the summer of 2014, based on latest reports released by the Central Bank of Iran (CBI). Ever since the start of stagflation period (starting in spring of 2012 and ending in winter of 2014), the economy showed growth in spring of 2014 for the first time.

The CBI has published several reports over the past months, which were contested by some economists. One report indicated that the inflation rate fell to 17.2% in the month of Azar (ending December 21). Another report showed the economy grew by 4.6 percent in spring and by 3.7 percent in summer. GDP growth in the first half of the fiscal year (ending Mach 20) was reported to have reached 4 percent. Prior to spring, the economy experienced two years of negative growth.

There are criticisms about the CBI reports on development and economic growth. Analysts believe, while economic growth is not making tangible changes in daily life of the population, the CBI’s promising economic reports are hardly acceptable by the people.

Endorsing the CBI’s recent reports, President Hassan Rouhani’s advisor Masoud Nili, said: “Economic growth is impalpable by nature otherwise there would be no need to spend plenty of time and effort to measure it”. The recent growth report does not mean that all economic activities are recovering, he said, adding that: “It basically means that economic activities on average have showed a positive trend.”

Economic problems can be solved only through “sustainable and steady growth,” which Nili said would only be feasible through the easing of investment regulations. “We have to make every effort to create jobs for those born in the sixties (Iranian calendar),” he underlined. Iran had a population boom in the 1980s.

In another development, head of CBI’s Economic Statistics Center Alireza Moghtadaiee, said that economic growth continued over the third quarter of the current fiscal year (from September 23 to December 21). Growth in the first quarter was 3.7 percent and 4 percent over the second quarter, based on CBI’s reports.   

Inflation has been of the declining order over the past months and is now hovering around 15 percent. President Rouhani has on several occasions said the government’s top priority is to reduce the inflation rate, which reached 40.4 percent in October 2014. The administration is trying to lower the inflation rate through a long-term plan.