Iran's Q1 Jump in Jobs Under Scrutiny

EghtesadOnline: The Iranian economy generated 321,000 jobs in the first quarter of the current Iranian year (March 21-June 21), indicating a 0.1% growth compared with the same period of last year, the Statistical Center of Iran announced in its latest report.

News ID: ۷۴۷۹۲۹

21 July 2019

The unemployment rate, the proportion of jobless population of ages 10 years and above, stood at 10.8% in Q1, indicating a 1.3% decrease year-on-year, despite the shrinkage of gross domestic product by 4.9% last year.

However, Hojjatollah Mirzaei, former deputy mayor of Tehran for planning and urban development, believes that quarterly unemployment data do not provide a complete picture of labor market since there are several local and regional variables that can influence the outcome of the reporting process, the Persian weekly Tejarat-e Farda reported.

“A three-year period of study is needed to make a reasonable, reliable estimate about the general situation of labor market,” Financial Tribune quoted him as saying.

“There are discrepancies between figures provided in quarterly labor force reports and the findings of the national population and housing censuses that are carried out once every five years. The outcomes of censuses are usually more reliable as the seasonal shifts of the labor market are large.”

Mirzaei noted that the quarterly unemployment report points to a decline in participation rate, meaning the decrease in unemployment rate did not necessarily lead to a rise in the number of job opportunities, and could be due to the economic participants' disappointment in finding work.

SCI put Q1 labor force participation rate—the proportion of the population of ages 10 years and above that is economically active either employed or looking for job—at 40.6% or 27.33 million people, registering a 0.5% decline year-on-year.

Men’s and women’s economic participation rates were 65% and 16.1% respectively in the same period.

SCI reports that 21.94 million of men and 5.39 million of women of ages 10 and above were economically active in Q1, i.e. they were either employed or looking for job.

“Job opportunities in agriculture, tourism, transportation and construction sectors traditionally increase in spring and summer, but they are usually of temporary or part-time nature,” he said.

“Recent developments, including the depreciation of local currency against the dollar, have reduced the number of foreign labor force in Iran. Official statistics say as many as 700,000 and unofficial numbers talk of one million Afghan refugees leaving Iran over the past year, which naturally opens up labor market opportunities for the locals.”

Asked about the prospects of labor market in Iran, Mirzaei said that in view of the looming recession and uncertain market conditions of last year, the slowdown in Iran’s economic growth will probably linger next year, particularly in key economic sectors such as construction where many temporary, part-time jobs have been lost.

“Given the US sanctions, most enterprises have to struggle with the same problems. The government needs to focus its efforts on preserving current jobs rather than creating new jobs … The links and interactions between corporations must be strengthened to improve their synergies. The government needs to implement more comprehensible policies to control market instabilities.”

Iran's gross domestic product shrank by 4.9% in the fiscal 2018-19 compared with that of the previous year, the Statistical Center of Iran's latest report shows.

Economic growth, excluding oil production, stood at -2.4%, the report added.

Production of the two groups of "industry" and "agriculture" contracted by 9.6% and 1.5% respectively. The "services" group posted a meager 0.02% growth.