According to Khabar Online, Iran’s economy is approaching the final months of 1405 in a situation where a series of political, security, and economic risks have made the outlook uncertain. On the one hand, the political developments of America and Israel and the possibility of continuation of regional tensions have made the economic decision-making environment more complicated, and on the other hand, chronic disagreements, erosion of social capital and the pressure of sanctions have limited the ability of the country’s economy to deal with external shocks.
In an interview with Khabar Online, Vahid Shaghaghi Shahri, drawing a worrying perspective of Iran’s political economy, believes that in the next two years, the country will continue to face the conditions of neither war nor peace and growing economic pressures. From his point of view, this situation doubles the need to review economic policies and move towards a pattern of economic resistance.
Two years of chaos waiting for Iran’s economy
Referring to the political developments in the US and Israel, Shaghaghi Shahri believes that the results of the US Congress and Senate elections in November 1405 can affect the political equations of this country. According to his prediction, there is a possibility of the Democrats controlling the House of Representatives and achieving a fragile majority in the Senate; An issue that can face Donald Trump’s administration with serious limitations in the field of legislation and implementation in the last two years of its operation.
Also, referring to the political differences in Israel, he believes that achieving political stability in this country will also be accompanied by difficulties. According to this economist, the simultaneity of these developments can create a period of ambiguity and instability in the political and security equations related to Iran.
Shaghaghi Shahri warns that in such a situation, there is still a possibility of the continuation of the situation of neither war nor peace and the intensification of economic sanctions. According to him, the opposite parties will also try to put more pressure on Iran by focusing on internal divisions and exploiting social dissatisfaction.
However, from his point of view, the issue is not limited to external pressures. Economic disharmony and erosion of social capital, along with sanctions, have reduced the country’s capacity to face new crises. For this reason, traditional and retrospective policies are no longer able to respond to the complexities of the current situation.
Negative economic growth 6 Percentage and inflation 100 percentage at the end of the year
This economist provides alarming predictions in drawing the perspective of macroeconomic variables in 1405. His estimate is that the country’s economic growth will reach a negative range of 5 to 6 percent at the end of the year; A situation that indicates the deepening of the recession and the reduction of the production capacity of the economy.
Shaghaghi Shahri also predicts point-to-point inflation in March between 90 and 100 percent. According to him, the continuation of inflationary pressures and price instability will make the living conditions of households more difficult.
In the monetary field, this economist expects the growth of liquidity to reach 60-65% at the end of the year and the amount of liquidity in the country to be in the range of 24-25 thousand hemats. He believes that the continuation of monetary disharmony and the increase in inflationary expectations can increase the dollar rate in the informal market to around 250 thousand tomans.
Economic resistance is not possible without governance reform
Shaghaqi Shahri considers it necessary to adopt economic stabilization policies in the face of such a prospect. From his point of view, the first step to overcome difficult conditions is to establish data-oriented governance and reform the government’s revenue structure. In the same framework, he suggests that the share of tax revenues in securing the government budget should reach at least 80% and monetary discipline should become one of the main policy priorities.
This economist also emphasizes the necessity of controlling the growth of liquidity and suggests that the growth of this variable should not exceed 50% this year and gradually decrease to a maximum of 40% in 1406 and 1407.
In the field of livelihood support, he considers the implementation of the product catalog and centralized supply and distribution of at least five strategic and essential items to be the duties of the government. Replacing imports with domestic production, of course, while maintaining the competitiveness of companies, is another axis of his proposal.
At the same time, Shaghaqi Shahri believes that the supply side of the economy should not be weakened by wrong policies. For this reason, it is necessary to direct bank credits towards active and well-known production companies, create a green banking and tax corridor for these companies, and manage foreign exchange resources in a targeted manner. He also emphasizes on prioritizing the allocation of foreign exchange and organizing the import of key items in the context of trade restrictions.
fight against corruption; A prerequisite for the restoration of public trust
However, the most important part of this economist’s view is the necessity of reforming the governance structure and dealing with corruption and rent. From his point of view, economic resistance cannot be achieved only with a set of monetary, financial and commercial policies, and until the structural inefficiencies and areas of corruption and rent are not corrected, the possibility of success of economic programs will be limited.
Shaghaghi Shahri believes that rebuilding public trust and strengthening social capital is a prerequisite for overcoming the crises ahead. According to him, if the society is going to bear the cost of domestic and foreign economic shocks, the government and the sovereign must provide the ground for the restoration of public trust by reforming the governance method, seriously dealing with corruption and creating transparency.
All in all, from this economist’s point of view, Iran’s economy is on the threshold of a period that cannot be overcome only by managing external pressures. Internal dissensions, weak economic structures and erosion of public trust play as much role in determining the fate of the country’s economy as sanctions. Therefore, economic resistance can become an effective strategy when, in addition to economic stabilization policies, institutional reforms and real confrontation with corruption and rent are also on the agenda.
The full text of this conversation from here read
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