Budget deficit is one of the inflationary structural factors in Iran’s economy/ we should go towards sustainability and development of production

According to the economic correspondent of Fars News Agency, Kamran Nedari in an interview with the Khabar section of Sima, referring to the orders of the Revolutionary Leader and the slogan of the year “inflation control and production growth”, said: “Most of the country’s banks have suffered from financial helplessness and as a result lack of liquidity, this has caused were able to withdraw from the resources of the central bank and the disorderly situation of banks has become one of the important factors of the high growth of liquidity and inflation.

He added: The speed of liquidity growth does not match with the speed of economic movement, in such a way that the economic growth in the last decade was very low and the growth of liquidity was at a high level, which caused inflation and inflationary shocks.

This university economics professor said: One of the shocks to liquidity was the removal of the 4200 Toman currency, which caused prices to increase in the short term, which was effective in inflation, and among other factors of inflation, we can mention the effect of sanctions, which caused the growth of liquidity and The prices have increased, and also the psychological and expected effects of inflation have been formed from the place of the increase in the exchange rate.

He called interventions in banks and weak supervision of banks as the reason for the crookedness of private banks and said: This issue has caused financial helplessness and problems in the banking network.

Nederi stated: After solving the budget problems, the government must fulfill the commitments it has accepted, including organizing the banks that had overdrafts from the central bank, if the government wants to correct it, on managing assets and liabilities and liquidity. And the risk of banks has an effect, which has caused problems for banks.

He added: the prudential regulations of the banks are not taken seriously, which makes the situation of the banks fragile, and we have a problem that whenever we want to reform the banking system, as a result, the facilities of the banks are limited and we worry about the production because the banks are strict and whenever the facilities Banks become overcrowded, causing liquidity and inflation, which creates a vicious circle, so banking reform is a tough decision for the government to make.

Referring to the world’s experience in this regard, he said: In the world, it is usually not possible to simultaneously control inflation and seek the growth of production, and this is a difficult and difficult decision that countries usually go for one of these goals.

In the continuation of this program, Bahram Ebadpour, an economic expert, said: Considering that inflation has become chronic in our country’s economy and has continued for three to five periods of 10 years, the root of inflation is not only in monetary policies, but in the real variables of the economy. And production problems also affect inflation.

He said: The most fundamental structural factor in Iran’s economy that has caused inflation is the government’s budget deficit, which has caused the growth of liquidity and an increase in the monetary base, and to compensate for the budget deficit, the government reached into the pockets of the Central Bank and borrowed and printed money to compensate for the budget deficit. has taken action

Abadpour stated: The 13th government tried to compensate for the budget deficit instead of borrowing from the central bank by handing over non-productive assets, and instead of increasing the monetary base and printing money, it went towards the production of non-productive assets.

This economic expert said: Apart from the monetary policies, production as a real variable of the economy has become one of the factors causing chronic inflation, so the choice of the two words inflation control and production growth were two smart words that by controlling inflation, we can move towards the prosperity of production. .

He said: “Monetary policies will control inflation in the short term, but in the long term, the production platform must be provided, we must move towards sustainability and development of production, and this is a heavy duty on the shoulders of the government, trust should be returned to the decision makers.”

Abadpour emphasized: The growth of production in the long term provides an important basis for curbing inflation.

He also said: There are short-term, medium-term and long-term solutions for inflation, which include interest rate control, capital market attractiveness, directing liquidity towards production, boosting domestic and foreign investment, Iran’s agreement with China and Russia promises to boost foreign investment.

Abadpour stated: In the long term, production infrastructures such as electricity and gas should be increased and economic laws should be stabilized.

In this program, Bahauddin Hosseini Hashemi, another economic expert, referring to the bankruptcy of Silicon Valley and Signature Banks in the United States, said: interest rates and unpredictability of the risks of these banks have caused their bankruptcy and accumulated losses, so there should be strict control and supervision in monetary policies. , currency and banking should be done and the real market of goods production should also be boomed.

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