Iran faces a sharp drop in activity but increases its exports by 23%

Gas and electricity cuts came on top of shrinking domestic demand, digital censorship measures and rising costs caused by the inflation-depreciation loop and the imposition of administered prices.

The rise in production costs had an impact on the level of job creation, at its lowest level for ten months. Among the difficulties identified by purchasing managers, we can note:

– administrative closures of factories to regulate energy consumption;

– the increase in costs, producers having exhausted the stocks purchased at a better IRR/USD parity during the previous months;

– the rules for the repatriation of export earnings, in foreign currency including for companies paid in rials by Afghanistan and Iraq (refined and petrochemical products);

– the delegation by the Ministry of Industry, Commerce and Mines of the purchase and distribution of chickens to guilds (ettehâdieh), which will generate new income (agriculture).

According to the Customs Administration, during the first ten months of the 2022/2023 financial year, trade in goods with member countries of the Shanghai Cooperation Organization (SCO) would have amounted to 33.8 billion. USD (16.6 billion USD in exports and 17.2 billion USD in imports), an increase of 23%.

During this period, the main export destinations would have been China (12.6 billion USD, +10.1% y/y), India (1.6 billion USD, +8.5%) and Pakistan (1 .1 billion USD, +12.4%), while the main countries of origin of imports would have been China (12.7 billion USD, +33.2%), India (2.4 billion USD, + 104%) and Russia (1.1 billion USD, -9.8%).

Source : Embassy of France in Lebanon