Iran’s 8% GDP growth not attainable
Baku, Azerbaijan, August 3
By Dalga Khatinoglu -- Trend:
President Hassan Rouhani's speculation about Iran's GDP reaching 8 percent is very unlikely to be materialized, an Iranian official said.
The issue of blocked petrodollars, its volume, and spending method has been in the spotlight in local and foreign media. Valiollah Seif, the governor of the Central Bank of Iran, once put the figure at $20 billion and at $29 billion another time. Qolamali Kamyab, the deputy governor of the Central Bank of Iran said the figure was exactly $89 billion.
It's expected that billion dollars of Iran's blocked assets abroad would be release after sanctions on its economy are lifted. The blocks will be freed following the implementation of a comprehensive deal between Iran and the group 5+1 (the US, UK, France, Russia, China, and Germany) reached July 14.
What is important is the method of spending petrodollars, because any wrong usage of the money will have irreparable effects on the national economy.
"President Rouhani has stated that the freed petrodollars will be invested only to import industrial machinery and expand service and agriculture sectors. But, this is just a dream, because the government has so many problems that the petrodollars will never be invested in national projects and job creation plans," Head of Iran World Trade Center Mohammad Reza Sabzalipour told Trend August 3.
"It should be noted that the incumbent Rouhani administration, and the administration of former president Mahmoud Ahmadinejad, have already spent the rial-based equivalent of petrodollars. Each time Iran sold an oil consignment, the administration forced the Central Bank to provide the administration with rial-based equivalent of the sum in order to return the money to the state coffers once petrodollars are freed."
The current Iranian fiscal year 1394 (March 2015-March 2016) is one of the worst economic years in Iran, Sabzalipour stated.
"A projected 8 percent growth rate will not happen this year. But, if the Vienna agreement takes effect at the due date and the administration revises its fiscal policies, economic growth will be materialized next year."
Iran's GDP decreased from $557.9 billion in 2012 to $415.3 billion in 2014, according to the World Bank's estimation.
Rouhani said August 2 that his administration planned an annual 8-percent GDP growth in next years.
"Meanwhile, the inflation rate will not drop in the short term. It will take years considering mismanagements over the past years. Comments of political figures and statesmen on rapid economic growth and low inflation rate are more propaganda than reality," Sabzalipour concluded.
Iran's inflation rate decreased from above 35 percent in 2013 to below 15 percent currently.
Edited by CN