Iran Economy NewsDangerous Instability and Hyperinflation, Iran’s Economy in 2021

Dangerous Instability and Hyperinflation, Iran’s Economy in 2021

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In the latest World Bank estimate of the state of Iran’s economy, the statistics provided again show negative economic growth and the economy shrinking in the past three years.

Iran’s Economy Has Shrunk by 16.5 Percent Over the Past Three Years

According to a World Bank report, Iran’s economy has shrunk by a total of 16.5 percent over the past three years. This is a statistic for the underprivileged, who also have a hard time making bread, and millions who are hungry, which means that their tables are getting smaller.

A noteworthy point in this report is the forecast of economic growth of 1.5 percent next year, which is rejected by both economists inside the government and the report of the Research Center of Iran’s parliament.

Some economic analysts in the country not only do not consider the conditions facing the system to be prone to any development and progress, but also assess the continuing decline and rise of the current situation with many problems.

Iran’s Government: “We Are 40 Years Behind the World”

Impossibility: A Possible Possibility

One of these economists wrote in an article entitled ‘Run Ahead’: “The economy and market in Iran have unique definitions in such a way that their coordinates are different from other countries in the world. The business score, degree of economic competitiveness, corruption rate along with the instability of trends in the country are so unfavorable that not only has made development impossible in such an environment but also production has faced many challenges in such conditions,” wrote Donya-e-Eghtestad wrote on January 7.

Economic Growth Is Just an Illusion

The Research Center of Iran’s Parliament has also recently announced its concerns and warnings about the 2021 budget. The center, which has also questioned the optimism of the World Bank, says that economic growth and production boom and inflation should not be pursued at all, which are now just an illusion, but what is possible and desirable is ‘predictability and economic stability’.

That is, the situation should not lead to the chaos resulting from demagogic schemes and the distribution of money that can only be obtained through the printing of banknotes.

Illusion of Growth

The lack of a realistic view of the 2021 budget revenues will put the economy in a state of instability, the report said.

“The study emphasizes that ‘the risk of hyperinflation is not far away’ and emphasizes that the expansion budget can only be reasonable if it does not threaten the macroeconomic stability of the country. This is unattainable for the year 2021,” Donya-e-Eghtestad added.

Thus, even a specialized parliamentary body, like other economists out of power, believes that any hope and expectation for growth slightly above zero in Iran is a mirage and that the more formidable danger of ‘super-inflation’ is imminent.

Economic Growth Aren’t Iranian Policy-Makers’ Priority

Government economic analysts believe that “policymakers should not make the fundamental mistake of proposing expansionary budgets because of the recession, as government resources are currently very limited and financial expansion will certainly lead to monetary expansion, leading to the risk of hyperinflation,” Alef website wrote on January 7.

“Therefore, if the 2021 budget is calculated on the basis of unrealistic sources, the country’s economy will be caught in the trap of high inflation and more instability in various markets,” Alef website added.

A noteworthy point in predicting very low probable growth for next year is acknowledging the fact that growth from oil sales and spending its revenues on missile construction and the cost of exporting terrorism and filling the pockets of the factions sitting on oil wells can make no difference in livelihoods of millions of Iranians.

The parliamentary research report explicitly points to this fact: “This study shows that for next year, under different scenarios, we can have a small positive economic growth or, if oil revenues increase, a significant positive growth through this sector,” Eghtesad 24 website wrote on January 7.

“However, it should be noted that even if there is significant positive economic growth, we cannot expect a significant improvement in the living conditions of households, especially in the lower deciles. Because this economic growth will be in sectors that do not have a significant impact on employment,” Eghtesad 24 added.

The Picture of Iran’s Economy in 2021

Studies and evaluations of international institutions and government centers in Iran show that the expectation of growth and the dream of overcoming the incurable economic crisis is nothing more than a fantasy. This means that there is no longer any window of hope that can straighten the broken back of the system, and the improvement of the living conditions of millions of poor people who are suffering from hunger and disease is a delusion.

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