Surging imports wipe out Iran’s trade surplus
Rapidly increasing imports wipe out the Rouhani administration’s positive trade balance, shining a light on the need to further promote exports.
TEHRAN, Iran — Economic growth is generally generated by four sources: increasing private consumption, expanding private investment, higher government consumption and investment, and more exports. At present, when it comes to the first three, there is no potential for picked up economic output in Iran. Although efforts have been made to increase private investment, the data still show that Iran is faced with an outflow of capital. Hence, the only option for the Iranian government to pursue sustainable economic growth is to elevate exports. In this vein, economists believe that if exports rise, production will also follow suit. This, in turn, will boost employment, which has long been a key challenge for successive Iranian administrations.
Mindful of the above, it should be borne in mind that the products any country usually makes are for two purposes: first for domestic consumption and second for exports. Various figures show that domestic consumption is not likely to experience an uptick due to lower disposable incomes of ordinary Iranians. Consequently, in such circumstances, the country should proceed toward exports and, in particular, non-oil exports, namely goods and services.
