Economy, Domestic Economy

Industrial Growth to Reach 4% by March

Industrial Growth to Reach 4% by March Industrial Growth to Reach 4% by March

The industrial growth rate is projected to reach 4% in the second half of the current year (September 2014-March 2015), Hossein Mehrizi, deputy minister of industry, mine, and trade stated on Sunday.

"The industrial growth rate has been always two percent higher than the country's general economic growth," he said, adding that official data shows that the positive industrial growth will continue for the coming months. Industry and mining sectors have always had an important role in the country's economic growth, he was quoted by MNA as saying.

Mehrizi added that the industry sector’s main need is the allocation of new finances, which he said will be included in the next year’s budget bill.

Industrial enterprises must work out new ways of financing rather than depending solely on bank loans, a strategy which he said “is not working anymore”. “The industry sector’s reliance on banking facilities must change. However, that is not expected to happen anytime soon.”

He also noted, “Making use of new ways of financing through the capital market, and providing the ground for channeling liquidity into production will be addressed in next year’s budget.”

Mehrizi noted that as the foreign exchange rate becomes stable through next year, the untapped capital would be channeled into the manufacturing sector. “Therefore, financing through the capital market along with banking loans can be used to encourage growth,” he asserted.

He said that industries have turned to other resources in order to meet their expenses during the current year, adding, “The production sector itself requires 1,500 trillion rials of working capital to increase output and growth.”

The Central Bank of Iran reported that the growth rate of the domestic industry sector fell from 10 percent to minus 13 percent at the end of autumn of 2012.

According to the report, the industrial growth rate was a little over 10 percent in autumn of 2010. It plunged to minus 0.6 percent in autumn 2011, plummeted further a year later to minus 13.7 percent.

The CBI report added that the economic growth rate in the third quarter of 2012 was a little below minus six percent and the average rate during the first nine months of 2013 was minus 5.4 percent, including the oil sector, and minus 2.4 percent excluding the oil sector.