Apr 4, 2018, 12:39 PM
News Code: 82877380
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Bright economic prospects for Iran by 2025: Indian economist

New Delhi, April 4, IRNA - A leading Indian economist believes that the value of Iran’s economy can easily grow from the current around $400 billion to $1 trillion by 2025 if Tehran focuses on growth-driving sectors.

“If Iran plans to grow its economy from the current around $400 billion to $1 trillion by 2025, it should focus on the growth driving sectors. The segmental growth estimates may be useful as a blue-print for a long-term economic vision,” Sourajit Aiyer said
in an exclusive interview with the Islamic Republic News Agency (IRNA).

“Such a high estimate may seem daunting, but countries like China and Malaysia achieved the decadal double-digit growth in the initial years of their growth-journey,” he said.

Elaborating on the capabilities of different sectors of the Iranian economy, he said, “It is estimated that around 54% of Iran’s GDP comes from services, mainly trade and transport.'

'While trade and transport would remain priorities, deepening the services-sector through the digital economy would bring in efficiencies in public-services delivery, bring more citizens into its organized economy and reduce the leakages of a cash-based economy.”

The expert said that services could also include ramping up the quality of skill-centres, to improve productivity and employment. 'All these would expand its addressable consumer-base and purchasing-power.”

As for the share of industrial sector in improving Iran’s growth rate, Aiyer said that “around 36% of Iran’s GDP comes from industry, in line with the average 30-35% seen in large emerging markets. So, if Iran’s industry has to hold itself at the 30% proportion, it has to grow at bigger rate.”

“In Iran, import comprised 21% of GDP, which is 60% of its share of gross investment. This is similar to the experience of recent industrializing nations, who saw their share of imports to be 50-60% of their share of investment. Iran has to continue this trend.”

Emphasizing the need to improve the agriculture productivity, he said, “For Iran to achieve productivity improvement, it has to re-skill unproductive labour for high-growth sectors like construction, transport and retail.'

'That would mean investing in skill-training. It also means investing in market linkages to ensure the end-farmer gets the correct price, apart from irrigation and mechanization to improve acreage yield.”

Pointing out that exports account for a fair portion of Iran’s GDP coming from exports, mostly oil, gas and petrochemical-related, the Indian economist said that the Islamic Republic's export has to grow at a higher rate “if it has to meet the forex demand for imports and keep trade imbalance nil.”

On the areas that Iran has to invest to achieve the goal, he said “Iran needs affordable housing, urban transport and completion of economic corridors that would connect its commercial zones with the underdeveloped districts.”

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