Central Bank Deputy's Prediction: Decrease in Inflation, Improvement in Growth Rate

Peyman Ghorbani, the Deputy Economic Governor of the Central Bank, predicted in an analytical note published in the Central Bank's magazine "Ravand" that the trend of decreasing inflation in Iran will continue, while also expressing his expectation for an improvement in the country's economic growth rate. Ghorbani's report, published under the title of the editorial note, serves as a substitute for the official periodic reports of the Central Bank in assessing the performance of Iran's economy in the first six months of the year 1394 (2015). In another part of his note, Ghorbani predicted that considering the decreasing point-to-point inflation rate, the trends in the producer price index, and the relative stability in asset markets, especially the currency market, the trend of decreasing inflation will continue in the upcoming seasons of this year. The Deputy Economic Governor also referred to the decrease in the economic growth rate in winter 1393 (2014) and spring 1394 (2015), attributing it to the significant drop in global crude oil prices and the ongoing limitations due to international sanctions until the implementation of the nuclear agreement. However, this official at the highest monetary institution in Iran expects that "with the complete removal of sanctions, the opening of capacities and resources in the country, and their proper utilization," positive effects on the economy and strengthening of Iran's economic growth will gradually emerge. In another part of the note, it was emphasized that in the first half of this year, nearly 65% of the government's development budget was not realized. According to this note, the government’s construction payments in this period amounted to 86 trillion rials, which faced a 22.7% decrease compared to the same period last year and achieved only 35.7% of the approved figure for the period. Ghorbani also reported on the diversification of government financial resources in the first half of this year, stating that "the share of oil resources from total public budget resources was about 32%, which shows a decrease of 10.8 percentage points compared to the same period last year. Last year, 42.9% of total public budget resources were provided by oil revenues. According to the Deputy Economic Governor, in the first six months of 1394, the government's operational balance faced a deficit of over 32 trillion tomans, which increased by more than 10% compared to the same period last year. This high-ranking official of the Central Bank announced the government's budget deficit in the first six months of 1394 to be 12.8 trillion tomans. In conclusion, the Deputy Economic Governor emphasized that structural reform of the banking system and addressing the existing issues in the balance sheets of banks and credit institutions are among the "priorities" of the Central Bank in the coming months. Ghorbani noted that to stimulate economic growth and improve financing, diversifying financial resources and increasing the share of capital markets and foreign financing in Iran's financial resources are among the strategies being considered and prioritized by the Central Bank.