Raisi’s New Achievement: A 5-Year Setback in Foreign Trade

Raisi’s New Achievement: A 5-Year Setback in Foreign Trade

Raisi’s new achievement is a 5-year setback in foreign trade. According to Iran Gate, the statistics and figures related to Iran’s trade volume in the first half of 2023 indicate a regression to the years of the 1990s. The non-oil trade deficit of the country has also increased by more than 4 billion dollars in the first six months of this year compared to the same period in 2022.

According to a report recently presented by Mohammad Reza Razvani Far, the head of Iran’s customs, the trade balance of Iran in the first half of 2023 has experienced an unprecedented drop compared to previous years. This is while Ebrahim Raisi and the members of the thirteenth cabinet have always claimed an increase in oil and oil product exports and reported sufficient foreign currency for importing goods. The Deputy Minister of Economy and the head of customs in this report has warned about the worsening non-oil trade deficit, which indicates the unfavorable condition of industries and subsequently the rise in unemployment rates.

Report on the First Half of This Year

According to Razvani Far, the dollar value of exports and imports in the first half of this year shows a significant decline compared to the same period in 2022. Additionally, based on this report, Iran’s foreign trade volume has also faced a significant decrease. The non-oil trade deficit of the country has increased by more than 4 billion dollars in the first six months of this year compared to the same period in 2022.

According to the report by the head of Iran’s customs, the dollar value of the country’s exports in the first half of this year has been recorded at 24 billion dollars. Additionally, the dollar value of non-oil goods exports in the first half of this year has experienced a decline of more than 42% compared to the same period in 2022. This is while this figure has only been repeated three times in the last 10 years, and in the last 5 years, the country’s export level has reached its lowest point.

In terms of the dollar value of imports, we have reached a concerning figure of 3,044 billion dollars, which is unprecedented since 2018 when Trump exited the JCPOA. Compared to the same period last year, we are witnessing a decrease of more than 14 billion dollars in the country’s imports, which is equivalent to a decline of more than 30% in the dollar value of the country’s imports in the first half of 2023.

The Fall of the Country’s Foreign Trade Volume

According to Razvani Far, the volume of Iran’s foreign trade in the first half of this year has been recorded at about 54 billion dollars. The statistics and figures indicate a decrease of more than 37% in the country’s foreign trade volume compared to the same period last year. Therefore, it can be said that Ebrahim Raisi’s government has recorded the lowest level of foreign trade in the country in the past 5 years.

What is the Reason for This Fall?

Economists have repeatedly warned since the beginning of last winter that the new policy of the Central Bank could seriously harm the country’s foreign trade and subsequently the job market and the boom in Iranian industries because Mohammad Reza Farzin, from the very beginning, implemented a policy of suppressing demand for the foreign currency needed for imports. This policy, which was implemented with the aim of controlling the exchange rate, paved the way for an unprecedented fall in the country’s foreign trade volume in the last 5 years.

In fact, the Central Bank intended to suppress the demand to curb the dollar price in the domestic market and keep it within the range of 49 to 50 thousand tomans. It should be noted that despite the claims of Ebrahim Raisi’s government about unprecedented increases in oil revenues, the Central Bank did not have sufficient access to foreign currency resources, and hence resorted to suppressing the demand side. This is while the behavior of the Central Banks of the Islamic Republic indicates currency injection in the foreign exchange market when there are sufficient oil revenues, but in two periods, the exit of Trump from the JCPOA and the year 2023, the Islamic Republic was forced to adopt an alternative policy, which was suppressing the demand side in the foreign exchange market due to declining oil revenues.

This very policy led to a significant reduction in the level of imports. Many industries that needed to import raw materials faced difficulties in obtaining the required foreign currency. Naturally, this also led to a decrease in the production of non-oil products in the country. Therefore, we are witnessing a sharp decline in the dollar volume of the country’s exports in the first half of 2023.

However, it doesn’t end here, as many analysts believe that the main impacts of this policy will become apparent in the second half of this year because many production units had stocked some of the raw materials they needed in warehouses, but these warehouses are now empty and naturally require foreign currency resources for imports. Therefore, it is expected that the country’s trade balance situation at the end of 2023 will be much worse than the level we are currently seeing for the first half of this year.