Iranian economy grows 37 in 9 months CBI

Iranian economy grows 3.7% in 9 months: CBI

Tehran - The Governor of the Central Bank of Iran (CBI) announced that the country's economy has experienced a 3.7 percent growth in the first nine months of the current Iranian year (March 20 - December, 20 2024), IRNA reported.

Mohammadreza Farzin, referring to the stable and consistent economic growth of the country, said: "The economy of the country experienced a 3.7 percent growth in the first nine months of the current year, which is a suitable and acceptable growth rate compared to the global average and the regional countries."

Farzin compared Iran’s economic growth rate to other countries, saying: “China and India remain the main engines of global economic growth, while European countries have had low growth rates for years. Iran’s 3.7 percent economic growth rate, compared to regional countries like Turkey (2.8 percent), Saudi Arabia (1.4 percent), Pakistan (2.5 percent), Iraq (1.4 percent), and the average growth rate of the Middle East and Central Asia (2.4 percent), is relatively good and acceptable.”

The official emphasized that while the 3.7 percent growth is satisfactory, it still falls short of the target growth rate of 8.0 percent, and efforts must be made to achieve this goal. "We hope that in the fourth quarter of the year, the growth rate figures will improve."

Farzin also explained that despite a slight decline in growth in the summer, there was a resurgence in economic growth in the fall across various sectors.

Regarding the growth rates in various sectors, Farzin explained that services account for almost 50 percent of the Gross Domestic Product (GDP), agriculture makes up 10 percent, industries and mining account for 30 percent, and oil represents only 10 percent of GDP. Therefore, the services sector has a significant impact on overall economic growth.

On growth based on expenditure items, Farzin shared the growth rates for private sector consumption, government consumption, and capital formation. Private sector consumption grew by 3.3 percent in the first nine months, while government consumption showed a recovery over the course of the year, with a 3.4 percent decrease in the first quarter, followed by 4.4 percent growth in the second quarter and 7.9 percent growth in the third quarter.

He added that the rate of investment formation showed an increasing trend throughout the year, with growth rates of 2.2 percent in the spring, 3.3 percent in the summer, and 4.4 percent in the fall. In total, the growth rate of capital formation reached 3.4 percent in the first nine months.

Farzin discussed the country’s monetary policy and the central bank’s strategies to control inflation. The annual inflation rate decreased significantly from 55.7 percent in early 2022 to 35.4 percent in February 2024. He emphasized that with new policies for the coming year, further reductions in inflation are expected.

He also addressed the point-to-point inflation rate in February 2024, stating that it had slightly increased due to fluctuations in the exchange rate in the NIMA system and expectations of a rise in the exchange rate from 28,500 to 38,000 tomans. However, he reassured that this rate is manageable, and the continuation of the preferential exchange rate policy for essential goods is a priority.

The CBI governor also commented on the producer price inflation, which had risen to 82.6 percent at certain points but decreased sharply to around 40.4 percent at the beginning of 2022. By February 2024, it had further decreased to 26.7 percent. He explained that producer price inflation serves as a good predictor of consumer price inflation, and with the expected reduction in producer price inflation, consumer inflation is expected to follow the same downward trend.

In conclusion, Farzin emphasized that despite the challenges, all sectors of the economy had shown growth, with the non-oil sector being the main driver. He stated that the central bank would continue to pursue policies aimed at stabilizing the monetary system while providing adequate liquidity to businesses through new credit policies, especially for working capital, to ensure economic growth without fueling inflation.

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source: tehrantimes.com