TEHRAN, Iran, Aug.17
Trend:
Inflation rate and recession are predicted to rise in the current Iranian year (started March 21, 2021), said a university professor and economic expert.
"There is a fundamental issue in the field of inflation and require structural reform and solving this not possible in short term," Vahid Shaghaghi, told Trend in an interview.
Professor went in to say that in Iran there are three imbalances that create inflation which are budget deficit, unbalanced banking system, and uneven non-oil foreign trade sector also known as a non-oil trade deficit. The following unevenness would continue in the current Iranian year.
Shaghaghi noted estimations indicate Iran would have a $95 billion budget deficit.
"Non-oil trade imbalance would also have a $17 billion deficit. Non-oil trade deficit includes non-oil exports minus imports. The imbalance has always existed in Iran's economy, that It did not show itself with oil revenues by the absence of sanctions but in a situation that oil export is sanctioned these deficits affect foreign currency rate," he added.
"The three imbalances would intensify by the end of the current Iranian year, budget deficit and the trade deficit is known as twin deficit beside imbalance in the banking system are inflammable like a haystack," the professor stated.
Shaghaghi stressed that the roots of these problems, was an accumulation of economic inefficiency in Iran for more than 40 years, that could be organized by operational budgeting, reform of banking system and development of non-oil export and reduce of import and control of smuggling commodity, but fixing these issues is difficult and long term task.