Analysis of Iran’s Last Year’s 3.8% Economical Growth

Analysis of Iran’s Last Year’s 3.8% Economical GrowthAccording to most Iramian economists the economic growth surveys show a figure of 3.8% in the Iranian year of 1396 (March 21st., 2017- March 20th, 2018).

From the viewpoint of some analysts, the step by step survey of such a figure is as follow:


From the perspective of the “final expenditure”  items, the economic growth of 3.8% has been announced for 1396.

The main factors with positive effect on the above growth are the followings;

▫ The private sector growth with a share of 0.98% ;
▫ The public sector growth with a share of 0.37%;
▫ Increasing of the gross fixed capital investment by 0.23%.

Taken together, the effect of the above factors on 3.8% growth of GDP is 1.58%.

The final negative effect of the “net export/import” balance on economic growth of 1396 is equivalent to “- 0.61%” of the total (positive export share of 0.52%, and the negative import share of 1.13%). In fact, the total trade balance has not been a driving force for the country’s economic growth. As a result of the higher negative import impact on the low export effect, the net effect of trade balance on the growth of 1396 was negative.

The contribution of the positive and negative factors (private sector consumption, public sector consumption,  investment and net trade) is only 0.97 percent. In other words, the rest sharing effect of 3.8% growth of the economy, with a higher impact than previous factors, is the growth of inventories and statistical mistakes, which accounted for 2.8% of the share.

The stock of inventories and statistical mistakes in 1396, taking 1390 prices a constant index, at a constant price of 1390 is equal to 112.8 thousand billion Toomans, which has increased by 21% compared with 1395.

The rate of changes in inventories and statistical errors in GDP increased from 15.4% in 1395 to 18.1% in 1396, which could be indications of deepening the problem of domestic demand and demand deficiency in the country’s economy.

In the year 1396, the investment in the field of machinery is only 2.4%, which is low due to the high demand of the country for investment, especially in the productive fields.

Analysis of Iran’s Last Year’s 3.8% Economical Growth
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