Page 18 - IRANRptAug22

“This crisis unfolds while the global economy was on a mending path but had not yet fully recovered from the COVID-19 pandemic, with a significant divergence between the economic recoveries of advanced economies and emerging market and developing ones. In addition to the war, frequent and wider-ranging lockdowns in China—including in key manufacturing hubs—have also slowed activity there and could cause new bottlenecks in global supply chains. Higher, broader, and more persistent price pressures also led to a tightening of monetary policy in many countries. Overall risks to economic prospects have risen sharply and policy trade-offs have become ever more challenging.”
4.0 Real Economy 4.1 Industrial production
Iran’s industrial output up 6% y/y in first three Persian calendar months says central bank
Iran’s industrial sector grew by 6% in the first three months of the Iranian calendar year (March 21-June 21), according to Deputy Industry Minister Mehdi Sadeqi Niaraki. Sadeqi Niaraki was reported as citing Central Bank of Iran (CBI) data by the semi-official Mehr News Agency.
The uptick coincided with a cessation of coronavirus (COVID-19) restrictions across the country, with factories returning to work. However, industrial production remained at a stubbornly low level due to the severe devaluation of the Iranian rial against hard currencies, forcing producers to bump up prices.
In the first four months of the Persian calendar year (March 21-July 22) more than 2,000 production units and over 54,000 jobs were created, the minister added. Year on year, job creation in industry was up 46%, he said.
The CBI, meanwhile, has given a figure of 6.2% for Iran’s GDP growth in the first three months of the Iranian year, official news outlet PressTV has reported. The figure was 4.7% excluding oil.
The central bank reportedly calculated the data against prices of 2016, using that year as a base year because the Iranian rial was firm against international currencies in that year.
On September 19, bne IntelliNews published analysis making the case that Iran’s economy is often wrongly seen as heavily reliant on hydrocarbon sales. According to the article: “We can start with the big picture, and kill an early assumption. Iran is not a hydrocarbon economy. Even in their un-sanctioned state hydrocarbons value-add rarely rose above 20% of GDP and for most of the time hydrocarbons contributed around 15% of GDP – far lower than the 40-80% levels which prevail in the true hydrocarbon economies of Saudi Arabia, Qatar, Kuwait and Venezuela.
“In its (present) sanctioned state hydrocarbons account for less than 10% of Iran’s GDP. To put this in perspective, 12% of the UK’s economy is generated by tourism, but no-one would describe the UK as a tourist-dependent economy.”
18 IRAN Country Report August 2022 www.intellinews.com