Baku, Azerbaijan, April 5
By Fatih Karimov, Umid Niayesh - Trend:
Stagflation and high unemployment will continue in Iran during the current Iranian calendar year, which started on March 20, Mohammad Reza Sabzalipour, head of the Iran World Trade Center said.
"Despite a relative stability in the society during the past eight months thanks to a positive atmosphere created after the presidential election and the Geneva deal, the Iranian economy's perspective will not be so bright due to various reasons, Mohammad Reza Sabzalipour told Trend on April 5.
He went on to say that "this issue requires the all parts of the administration to be unified in order to prevent the situation from getting worse."
Although the International Monetary Fund (IMF) and the World Trade Center believe that there are signs of economic stability in Iran, they are also of the opinion that the economic situation in the country has deteriorated notably in recent years and the country's economy has suffered losses due to the international oil and banking sanctions, as well as the implementation of the subsidy reform plan, Sabzalipour said.
Iran's oil exports fell sharply in the last Iranian calendar year, the IMF said in its report.
Iran exported around $56.3 billion worth of oil, gas, and condensates in the past year, compared to $62.9 billion and $118 billion two and three years ago, respectively, according to the report which was published on April 3.
Iran's economy grew by three percent in calendar year of 1390 (March 2011-March 2012), while it contracted by 5.8 percent and 1.7 percent in 1391 (March 2012-March 2013) and 1392 (March 2013-March 2014) respectively, the IMF said.
Despite some signs of economic stability, the short-term outlook of the Iranian economy is vague and recession, inflation and high unemployment will be continuing in the current year, according to Sabzalipour.
The implementation of the second phase of the subsidy reform plan, which will lead to increase in prices of fuels, some basic foods, and transportation costs, as well, the administration's budget deficit, the ambiguity in the future of the Geneva nuclear deal, the dispute between political factions in the country, and the pessimistic view of people towards their future, are among factors which will put pressure on the administration and will fuel stagflation and high unemployment in the country, the head of the Iran World Trade Center said.
Iran plans to implement the second phase of the subsidy reform plan by late Iranian calendar month of Farvardin (which will end on April 20).
Iranian President Hassan Rouhani earlier said the government is determined to implement the second phase of Subsidy Reform Plan in the new year, while assuring the nation that the pace of price hike as a result of implementation of the plan will not be so grave to cause an economic shock for the people.
The subsidy reform plan is aimed at easing pressure on state finances by cutting tens of billions of dollars from government subsidies on food and fuel. The government pays cash to citizens as compensation for increased prices by cutting subsides.
Iranian government currently spends $1.4 billion per month ($16 billion annually) on the cash subsidies, which is $4.74 billion more than its income from the subsidy reform plan.