Economy, Domestic Economy

Need to Achieve Sustainable Economic Growth

Need to Achieve Sustainable Economic GrowthNeed to Achieve Sustainable Economic Growth

Achieving a 4% growth—forecast by the International Monetary Fund for the Iranian economy in 2016—for a single year is not very significant, says the deputy head of Iran-China Chamber of Commerce.

Majid Reza Hariri added that what is more important is to reach a decade-long, sustainable economic growth to exit the current recession.

“Industrial sector, which is the main driver of economic growth, was shut down last year. Economic growth reached zero and a negative growth was staved off, thanks to the unplanned growth recorded for the agriculture sector following last year’s rainfall,” ISNA quoted Hariri as saying.

Latest figures by the Statistical Center of Iran show that the economy grew 0.7% during the nine months of the last Iranian year (March 21-December 21, 2015). Agriculture was the only growing sector (3.2%), whereas industrial and services sectors shrank 1.2% and 0.3% respectively.

Responding to a question on what sectors might see the highest economic growth in the current year (started March 20, 2016), Hariri said the rise in oil exports would boost economic growth to 6%, adding that gas condensates production is expected to increase by 1 billion barrels by yearend.

“We need to bear in mind that this economic growth is not a result of planning. Lack of planning is the Achilles’ heel of our economy. We fail to identify the true ways of attaining growth. It’s important to channel investment, whether domestic or foreign, in industry and economy to reach a sustainable 4% economic growth,” he said.

“It’s obvious that the capital flow in our market is not enough to result in long-term growth. We are forced to revamp our business environment drastically to absorb foreign investment and root out administrative and financial corruption.”

Hariri noted that when investors intend to invest their money into another country, they consider indexes, such as ease-of-doing-business, deregulation and competitiveness.

“That’s beside the point when it comes to oil and gas. Foreign investors line up for Iran’s oil and gas,” he said.

The latest report by World Economic Forum dubbed “The Global Competitiveness Report 2015–16” shows Iran’s Global Competitiveness Index jumped nine places to rank 74th compared to the previous year.

Iran’s rankings during 2012-14 were 66th, 82nd and 83rd respectively.