Coronavirus cuts Iran’s GDP by 15%

June 7, 2020 - 14:41

TEHRAN - Iranian Finance and Economic Affairs Minister Farhad Dejpasand said coronavirus pandemic has caused the country’s gross domestic product (GDP) to shrink 15 percent, IRNA reported.

Speaking in an open session of the parliament on Sunday, Dejpasand stressed that the government should look for new strategies to stimulate demand in order to improve the domestic economy.

Based on the latest data released by Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), Iran’s GDP stood at 24.73 quadrillion rials (about $588.8 billion) at the end of the ninth month of the past Iranian calendar year (December 19, 2019), Mehr news agency has reported.

Referring to the impact of the U.S. sanctions on the country’s economy, the finance minister said: "Even if oil exports were underway without any problems, we wouldn’t still be able to access all our resources, so this year we must experience a non-oil budget, which is based on tax revenues.”

According to the official, the revenues gained from the elimination of hidden energy subsidies as well as increased tax incomes will replace oil revenues.

Mentioning the alternative ways for replacing oil revenues, the official said: "The country's treasury has made plans to supply the development budget completely."

This does not mean pressuring the taxpayers, Dejpasand said, adding that by setting new tax bases and eliminating unnecessary exemptions at a time of economic warfare, more tax revenues will be provided.

Referring to the motto of the current Iranian calendar year (started on March 20) which is the surge in production, the minister said: "In this situation, we should put more importance on the development and surge in production; achieving this goal will mobilize other sectors and pave the way for eliminating unemployment and managing inflation.”

“To achieve sustainable economic growth, in the face of sanctions, we need to consider two issues: first, investing in the country’s new production capacities, and second, policymaking to increase the country’s already operational capacities”, according to Dejpasand.

He further noted that currently, only 55 percent of the existing capacities are being utilized in the country and if the figure increases to 75-80 percent, a good surge in production will be realized.

The official went on mentioning the country’s non-oil trade, saying, despite the sanctions, foreign trade is well underway, so that in the Iranian calendar year 1397 (ended on March 20, 2019) the country’s trade balance was positive, and in the previous calendar year 1398 (March 2019-March 2020), despite the escalation of pressures, non-oil exports fell only slightly.

EF/MA

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