Economic prosperity and declining inflation depend on directing liquidity to production

According to the Iran Economist, quoting the public relations of the Bank of Industry and Mines, he added: “Iran’s economy in recent years with the continuation of harsh sanctions, reduced oil revenues and the Corona virus pandemic has faced many problems and bottlenecks that have negative effects on Its supply and demand side and the country’s business environment; In such circumstances, achieving a boom in production requires the adoption of correct policies and approaches and diagnosis as soon as possible in order to eliminate obstacles or reduce their consequences.
He said: In general, the factors affecting production include three general categories; The first category is the factors that affect the supply of the economy, such as technological developments, productivity of production factors, reform of procedures and the application of new production methods and the creation of synergies and specialization; The second category: factors such as government revenue policies and consumer price index that affect the demand of the economy and the third category: factors outside the firm that simultaneously affect the supply and demand and are not controlled by the firm And includes factors such as laws and regulations, political atmosphere, interaction of executive bodies, etc.
Khorsandian pointed out: “It seems that in order to increase production, especially in the current situation where the country’s economy has limited access to domestic and foreign resources, the first and most important measure is to improve the business environment by using production inputs optimally.” Due to low technology and low share of knowledge-based economy, inefficient production procedures, etc., has been neglected, and the possibility of increasing production through this channel will be more practical and less costly than other options.
He continued: “This increase in production should be considered from both quantitative and qualitative aspects; A small increase in production means an increase in the amount of GDP that is reflected in economic growth, and of course, in order for this increase in production to be desirable and put the economy in balance and optimal conditions, it must also grow qualitatively and improve. Welfare indicators of the society should not lead to excessive destruction of the environment, unbalanced growth of regions and the spread of inequality, and should be considered in proportion to the exploitation of natural resources.
A member of the board of directors of the Bank of Industry and Mines stated: “In addition, production-related institutions should provide a stable environment for investment and production in interaction with each other, so that the interactions of these institutions with each other lead to increased production and economic growth.” Eliminate barriers or amend laws related to obtaining business licenses, property registration, commercial law, financial markets and investment security laws, bankruptcy and debt settlement laws, contract binding laws, and international trade. Make it smooth.
He said: “Also, the mentioned institutions should produce and publish contradictory statistics that inject uncertainty in the country and cause confusion among economic agents and activists, and one of the main factors is the withdrawal of capital from the real sector of the economy and moving to speculation and other activities.” To prevent proper planning and policy-making in the production sector, because the stability and predictability of the macroeconomy is the initial condition for domestic and foreign investment to increase production, and it is necessary to reduce inflation, rate stability Currency is within a reasonable range and is stable in the resources and expenditures of the public sector.
He reminded that in order to curb inflation, the main reason of which is the acceleration of liquidity in the country, it is necessary to remove as much as possible inflationary policies that lead to an increase in monetary base and liquidity, and to stabilize the foreign exchange market. Prevent the formation of speculative incentives in the market and the entry of blocked liquidity in the foreign exchange market into the real sector of the economy, increase production.
“Another important issue in controlling inflation is to reduce the share of oil revenues in the provision of government general budget resources, and to fill the gap in oil revenues, the tax system by changing the composition of tax revenues or introducing new tax bases as follows:” Create the least disruption in the production and business environment of the country, be corrected.
He emphasized: “In this, the banking system has an undeniable role and should direct liquidity to productive activities, and as we know, liquidity goes in the direction that creates the most return and desirability for its owner, and if To support production and enable policymakers to regulate other markets and minimize uncertainty, investment in this sector will increase.