Financial Tribune – Economy Minister Ali Tayyebnia said the effects of the country’s recent economic rebound will soon be felt more tangibly in the lives of ordinary Iranians, reversing a period of slowdown that weakened purchasing power and stoked unemployment.
“As Iran was mired in a deep recession following years of international sanctions, recovery has been underway but it has not been reflected in people’s lives, this is about to change,” Tayyebnia was quoted as saying by Shada, the official news service of the Ministry of Economic Affairs and Finance.
According to the minister, eight consecutive quarters of negative economic growth in 2012-13 made it evident that Iran was facing a recession that was gradually reversed after four quarters of positive growth in 2014.
“Does this growth mean that the economic conditions of the people have improved compared with 2011?” he asked.
“The answer is a definite ‘no’. A GDP contraction of 8% and a 20% cut in national revenues dealt such a blow that increasing people’s income became a very difficult task.”
The 2014 oil price fall added insult to injury, but the nuclear accord (officially dubbed the Joint Comprehensive Plan of Action signed in 2015) signaled a U-turn and a growth of 8% followed.
During the previous fiscal year that ended on March 20, 2017, all sectors except the housing sector–now in its fifth year of recession–registered a positive growth with the oil sector at the top.
According to the economy minister, claims of economic growth not being tangible are “inaccurate” and the Iranian public can expect to “feel the results of this growth in their incomes and businesses more strongly” in the current fiscal year (2017-18).
Tayyebnia pointed to international assessments show Iran improved its ease of doing business index by 32 places, 13 in terms of transparency and fighting corruption, 35 in innovation and 15 in job creation and development.
Last week, the World Bank published its Doing Business 2017 report, announcing that in the Middle East and North Africa region, Iran made exporting and importing easier by expanding the services offered by the national single window and acknowledged the fact that the country has taken strides to improve “trading across borders”.
The International Monetary Fund in its latest report in early March commended Iran for achieving an impressive recovery in economic growth after the lifting of nuclear sanctions in 2016, by maintaining inflation in single digits and stabilizing the foreign exchange market.
Tayyebnia touted the reduction of Iran’s dependency on oil income as an accomplishment, saying “the share of oil in the budget reached 31% in 2015, which was earlier 80% “.
Underscoring his point, the minister added that in the previous fiscal year, 720 trillion rials ($19.2 billion) of the 2.8 quadrillion rials ($74.6 billion) in the budget and government expenses came from oil revenues. That is while more than 1.13 quadrillion rials ($30.13 billion) worth of tax income were registered during the same period.
Tayyebnia referred to the low inflation rate and stability in foreign exchange market as other positive efforts undertaken in the past four years.
The inflation rate was brought down to single digits for the first time in more than a quarter of the century during the previous fiscal year, meaning that “today, we no longer see the 45% inflation” when President Hassan Rouhani took the helms of the government.
In 2012, the Iranian foreign exchange market experienced a shocking 92% jump in rates, which was followed by another 22% rise next year.
While in the previous year some intermittent fluctuations also hit the market, Tayyebnia downplayed them by saying, “These have been annually tamed to less than 5%.”