Economic Growth Reaches 4.4%; Rouhani Promises to Launch Thousands of Economic Enterprises

Hassan Rouhani, the President of Iran, announced that the country's economic growth reached 4.4% in the first quarter of 2016, promising that over 7,000 economic enterprises will be launched by the end of the current year. According to the state news agency IRNA, Rouhani stated on Sunday, August 14, in Yasuj that the economic growth, which was -6.8% at the beginning of his administration, has now surpassed 4.4%. He emphasized that his government, having successfully reduced inflation to single digits, will also restore prosperity to the economy with the support of the people. He pledged that by the end of 2016, 7,500 economic enterprises will be established in Iran. Rouhani also mentioned that the Vienna nuclear agreement has created conditions for 'breaking down walls' to foster 'economic prosperity.' On the same Sunday, the Iranian Statistics Center reported that economic growth in the first quarter of 2016 reached 4.4%. According to the Statistics Center, during this period, economic growth in the industrial sector was 8.8%, in agriculture 4%, and in services 2.9%. Rouhani and his government officials had previously expressed hope that economic growth would reach 5% in 2016. Before these statistics were released, many analysts had stated that while Rouhani's government has been successful in controlling inflation, it has not made significant progress in reviving Iran's economy. The economic growth rate, which was -6.8% in 2012, increased to -1.9% in 2013 and 3% in 2014 after Rouhani took office. However, this figure decreased to about 1% in 2015. The International Monetary Fund reported Iran's economic growth rate in 2015 as 0% and predicted it would reach 4% in 2016. Rouhani's emphasis on the impact of the nuclear deal on the country's economic revival comes as the Supreme Leader and his close associates have harshly criticized the tangible results of the nuclear agreement in people's lives in recent weeks and months. Additionally, some conservative figures, including Mohammad Reza Bahonar, have warned that conservative support for Rouhani in the 2017 elections is contingent on his success in economic matters. Bahonar even predicted that Rouhani's victory in the elections depends on economic prosperity, and if the elections go to a second round, Rouhani will fail. 'Optimism about the nuclear deal does not mean optimism about America,' the Iranian president emphasized in his remarks in Yasuj, also stating that the 'chains of sanctions' have been removed from Iran's hands and that the 'chains' preventing communication between Iranian and foreign banks have been 'broken.' Rouhani, referring to the visit of 350 economic delegations and 160 foreign political delegations to Iran, announced that after the Vienna nuclear agreement, 82 agreements and contracts have been signed with foreign countries, of which 29 contracts have been 'executed.' He added, 'Some may be unhappy that the sanctions have been lifted because it is not in their interests, but the great nation of Iran is happy and delighted with the lifting of sanctions.' The Iranian president also noted the 'discontent' of Israel and some countries along the southern shores of the Persian Gulf regarding the Vienna nuclear agreement, adding that 'optimism about the nuclear deal does not mean optimism about America.' On August 2, Rouhani defended the nuclear agreement, stating that it brought 'dignity' to Iran, whereas during the sanctions, 'we were always reaching out to others.' Despite the Supreme Leader Ayatollah Ali Khamenei's approval of the Vienna nuclear agreement, he and his close associates continue to criticize the agreement and what they call the 'government's optimism about America.' Meanwhile, Ahmad Alamolhoda, the Friday prayer leader of Mashhad, described Rouhani as a 'naive' person who believes Iran has achieved dignity through the nuclear agreement. The Supreme Leader has also protested the lack of an 'immediate' lifting of sanctions against Iran, calling the Vienna nuclear agreement 'a fruitless experience' of negotiations with America and emphasizing that 'regional problems and challenges' cannot be resolved through negotiations. Iranian officials have repeatedly stated that sanctions against Iran have been lifted on paper, but the U.S. and European countries need to make 'greater efforts' to eliminate the existing 'psychological atmosphere, especially regarding banking interactions.' Meanwhile, Iranian Foreign Ministry officials have stated that besides the concerns of European banks regarding sanctions, 'weak financial discipline' of Iranian banks in not cooperating with European banks has also been 'not insignificant,' and the Central Bank is working to resolve this issue. U.S. officials have also rejected Iran's claims, stating that they have acted 'beyond their commitments' in the nuclear agreement.