Rouhani Raises Hope for Job Creation

EghtesadOnline: President Hassan Rouhani on Wednesday struck an upbeat tone on the economy saying employment for the first time reached close to 24 million in the third quarter to November 22.

News ID: ۷۴۶۴۱۲

05 January 2019

Addressing a weekly cabinet meeting, Rouhani said in autumn 623,000 new jobs were added compared to the same period in the previous year.

"This is positive move given the circumstances of the country and when the number of employed at the start of my government (in 2013) was 20.6 million. In short, during the past years 3.3 million people found work," Rouhani said, the presidential website reported.

Rising unemployment was a major sticking point during the 2017 presidential campaign after which Rouhani was reelected for a second and final term.  According to the Statistical Center of Iran, the jobless rate in summer was 12.2%, according to Financial Tribune.

However, youth employment during that same period stood at 24.9%. University educated adults account for a massive 39.5% of the total population without work.

Rouhani said the pattern of enlarging payrolls is an indication that the government can curb unemployment.

The president referred to the non-oil trade balance during the nine months to December 22 that recorded a surplus of $750 million. He said the progress was thanks to both the private and government sectors.

Rouhani's remarks come as the monthly figures reveal that non-oil exports, which had picked up after the rial tanked, is now losing momentum. Exports uring the month to mid-December was $1.86 billion -- a whopping decline of 56% compared to the previous month.

According to the Persian-language financial newspaper Donya-e-Eqtesad  the fall in export value is due largely to government restrictions on exports through a multitude of directives, especially currency repatriation rules and delays in the import of raw materials needed for some export-based  goods.

In its last directive issued Tuesday, the Central Bank of Iran urged exporters to return their export earnings to "the country's economic cycle'' as their three-month deadline approaches.

Respecting in the Breach

Exporters say they have no problem with repatriating their currency earnings, but complain that the time limits and the compulsion to sell the currency via Nima (whose rates are much lower than in the open market) is an unhelpful rule (most exporters respect in the breach).

The president alluded to inflation rates released by the CBI Governor Abdolnasser Hemmat at the meeting and said "price volatility is under control."

Referring to the latest producer price index, he said a 4.5% monthly drop in PPI is "auspicious news" and a harbinger for economic indicators in the coming months.

According to CBI data, PPI (using the Iranian year to March 2017 as the base year for the first time) stood at 173.9 in the month of Azar, indicating a 4.5% decrease compared to the previous month.

The average PPI in the 12 months ending Dec. 21 grew by 30.6% compared with last year’s corresponding period, while in the preceding month annual PPI inflation was 26.9%.

Year-on-year consumer inflation rate, which was 39.9% by November 22, is forecast to keep growing. However, the CBI has not released the inflation rates for the Iranian month to December 22, citing differences with the Statistical Center of Iran, which is officially in charge of announcing inflation trends.

Referring to the US sanctions on oil exports, Rouhani reiterated that the "Americans will never achieve their goal in stopping Iranian oil and derivatives export."

Iran’s economy has struggled since US president Donald Trump pulled out of the 2015 nuclear accord in May and re-imposed sanctions, including restrictions on oil sales — the country’s lifeline The rial, the national currency, has depreciated by more than 50% this year while year-on-year prices of stable goods have increased by more than 60%, according to the Central Bank of Iran.