Hassan Rouhani: The Economic Situation Will Change Significantly Next Year

The President of Iran announced his government's intention to present a new economic package following the implementation of the nuclear agreement (JCPOA), stating that the economic situation in Iran will change significantly next year. On Tuesday night, October 21, Hassan Rouhani said in a live television program that the main goal of his government from the nuclear agreement was to attract foreign investment for domestic economic growth. He mentioned that the country needs economic structural reforms and a serious fight against corruption to attract foreign capital. Referring to the approval of the JCPOA implementation plan in the parliament session on Tuesday, he stated that after its confirmation by the Guardian Council, the agreement should be implemented starting next week when the 90-day deadline for the implementation of the nuclear agreement ends, and sanctions will be lifted from the day of implementation, although it will take about two months for the sanctions to be practically removed. Ali Akbar Salehi, head of the Atomic Energy Organization of Iran, also stated on Tuesday that the Vienna agreement will be fully implemented by early December. Rouhani continued to discuss his government's economic performance and its plans for the next six months or the post-sanctions period. He first pointed to the impact of sanctions and the closure of the international banking network on Iran, stating that this led to a reduction in oil revenues and inflation reaching 40 percent in the country. He mentioned that in 2011, Iran's oil revenue was $119 billion, but after banking sanctions, it dropped to $25 billion, which was the lowest oil revenue last year. However, despite all the problems, the government managed to reduce inflation, so that in September of this year, the point-to-point inflation reached 11.7 percent, and it is likely to become single-digit by the end of the year. Now, with the economic outlook after the sanctions, we want to achieve economic growth in the second half of the year, and my message to the people is that everyone should be ready for a leap in production and economic growth, and I tell the people that the economic situation will change significantly next year. Rouhani attributed the reduction in inflation mainly to the financial and monetary discipline of his government. He reiterated that the Iranian economy emerged from recession in 2014, and the statistics from the Central Bank and the Statistical Center also indicated an exit from recession, with his government controlling all macroeconomic indicators in 2014 through reduced inflation, economic growth, and market stability. He added that by controlling these indicators, Iran was able to show to the nuclear negotiation parties that it could organize its economy, which helped the Islamic Republic in negotiations by sending the message that sanctions were ineffective and should be lifted. The Iranian president once again, without naming any country, described the drop in oil prices in recent years in the global market as intentional and 'calculated,' stating that in the summer of 2014 and early 2015, just when Iran was nearing a final nuclear agreement in Geneva, 'suddenly a plan was made to reduce oil prices to influence the nuclear negotiations and also to pressure Russia,' and 'the negotiations were extended for seven months to extract concessions from Iran under pressure, which they failed to do.' He added that the drop in oil prices also led to a decrease in the prices of gas, petrochemical products, and productions like steel. Furthermore, the seven-month delay in negotiations, the prolonged time to reach a nuclear agreement, and the time taken for its implementation affected people's expectations and the level of demand, as people are waiting for the lifting of sanctions. The Iranian president stated that now, with the economic outlook after the sanctions, we want to achieve economic growth in the second half of the year, and my message to the people is that everyone should be ready for a leap in production and economic growth, and I tell the people that the economic situation will change significantly next year. He acknowledged the problems in the stock market and the lack of sufficient resources in banks to provide cheaper and more loans to investors and producers, stating that the government wants to provide these facilities and, through quick-return construction projects and subsidizing certain sectors of production, as well as paying off government debts to contractors, will increase demand and stimulate production. Rouhani urged the private sector to become active in the new conditions and also referred to the increasing presence of foreign resources in the country.