Economic growth depends on investment and production/budget deficit problem will be solved soon

According to Fars news agency, according to the public relations of the economic deputy of the president, Mohsen Rezaei, in the meeting of the economic deputies of the governorates across the country, stating that in this full-scale economic war, we must adopt a combative and defensive formation and with the spirit of martyrdom, jihad and without attention Bajangim said to the people present at the meeting: “You are now serving in one of the holiest times in the history of Iran, and do not be afraid of attacks and move forward with trust in God like the Bakris and Khorazis. You are God’s soldiers who promised in Difficulties are the helper of our servants and you can be sure that we will overcome these problems.

The economic vice president gave recommendations to solve the country’s economic problems and considered the serious challenge of the country’s economy to be the problem of the destructive cycle of inflation and currency.

He said: Currency price and inflation have a direct relationship with each other and each can control or exacerbate the other. When the currency price rises, the costs of raw materials and production intermediates become expensive because 30-40% of the country’s imports of raw materials are from the production sector. This increase in production cost directly affects inflation and raises it; Rising inflation raises the price of the currency again and thus an increasing cycle is formed and in this loop each factor increases the other factors and inflation, exchange rate and cost of production continue to rise.

Rezaei considered the solution to break this destructive cycle to be investment, production and market expansion and said: the country’s production should become competitive and quality production in order to reduce inflation by increasing supply. Also, production should be exported and with currency exchange, prices will decrease. currency; Therefore, production can reduce both inflation and currency prices, and the miraculous point is to eliminate this vicious cycle of investment and production and market expansion.

He continued: “Production without market and export means filling up the warehouses, which is useless. A production that has a market and export is useful, so the markets must be expanded. The production must be competitive in order to conquer the markets and it is necessary.” It is having technology, quality, proper packaging, professional marketing, holding exhibitions, etc., so that it can expand the domestic and foreign markets, and the business environment must be improved internally. This government has taken over 59,000 institutions and companies with low and defective production capacity, which have the potential to increase two and a half million jobs.

Rezaei added: In the last 100 years, we have reached factory ownership, but we have not industrialized; The difference between factory ownership and industrialization is the issue of value chain and marketing.

We have many factories in various fields such as oil, steel, petrochemical and automobile, but in none of these we have a complete industry from raw materials to final products; Where it becomes industrialized, a chain of factories related to a final product is formed, as soon as one factory’s production decreases, or it changes products with innovation, or it immediately withdraws from the value chain, and another factory takes its place.

Rezaei added: Our production can be effective and expand the market when we create a value chain from zero to one hundred in each product.

He added: The value chain includes innovation and ideas, design, laboratory manufacturing, semi-industrial manufacturing, industrial manufacturing, marketing, advertising, and sales. For example, in the field of automobiles, we started at the same time as South Korea, but until some time ago we were using the same French platforms. We have been designing and building several platforms for some time now. The automobile industry has only been an automobile factory; Therefore, local, provincial and national value chain should be formed.

He emphasized: “Industry miraculously accelerates and transforms the economy of a country, so we must move from factory ownership to industrialization. Inflation is the result of the government’s budget deficit (both hidden and obvious). Fortunately, we do not have an obvious budget deficit this year.” It should be noted that the budget deficit is different from non-fulfillment.

The vice president stated that there are two types of inflation, which is caused by cost and caused by demand, and added: As production increases, inflation decreases, production can attack the currency in two ways, which include investment and production. through the domestic market and the other is production for export.

Rezaei stated: Iran’s miraculous point is investment and production to break inflation, so production without a market and exports should not be done with the sole purpose of filling warehouses. to improve and lower the price of currency, therefore investment, production and market expansion is the secret of Iran’s success.

He considered expanding the market and leaving behind foreign brands and making domestic production more competitive depending on paying attention to technology and innovation, quality and product packaging and said: the product market should be expanded by paying attention to the aforementioned issues and all the components of strengthening considered the goods.

Emphasizing that the business environment should be improved, the economic vice president of the president said: We are a good factory owner, but we are not industrialized yet, the difference between industrialization and factory ownership is in value chains.

Rezaei stated: When value chains can be improved at the national and provincial level from zero to 100, when innovation, design, laboratory manufacturing, semi-industrial manufacturing, industrial manufacturing, marketing, advertising and sales are taken into consideration.

He stated: Automobile manufacturing in our country started at the same time as South Korea, but it has not yet reached the automobile industry and has not been able to create a new platform in this sector, so it should create local, provincial and national value chains in automobile manufacturing. Producers will not have problems in selling goods.

He stated: Our main problem in the country is investment, production and market expansion, so we should not only talk about production, but production is accompanied by the market and export, without marketing and export development, economic enterprises will suffer.

Rezaei added: Investment, production and market expansion in Iran have been moving at a snail’s pace during the past years, but in contrast to inflation and production costs, they have moved quickly and this issue has reduced the value of the rial and increased the value of the dollar day by day.

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