Abdolnaser Hemmati, the Governor of the Central Bank, at the annual meeting of the International Monetary Fund in Bangkok, referred to the resilience of Iran's economy against sanctions and external pressures, considering claims of the country's economic collapse to be mere illusions. These statements clearly indicate the multiple factors that have allowed Iran's economy to continue its activities despite severe economic constraints.
Factors Affecting Economic Resilience
One of the most important factors that has contributed to the resilience of Iran's economy is the diversity of economic sectors and internal capacities. Although oil and gas are recognized as the main sources of foreign currency income for the country, other sectors such as agriculture, food industries, consumer goods production, metal industries, petrochemicals, and mining also play a significant role in meeting domestic needs. Diversity in these sectors allows the economy to continue economic activities in other sectors in case of problems in one sector.
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For example, petrochemical industries with an annual production capacity of about 60 million tons can significantly contribute to meeting domestic needs and exports. This is while trade restrictions in one sector do not mean the cessation of all economic activities.
Reliance on Domestic Market and Banking Services
The domestic market also acts as a support for production and employment in Iran's economy. A significant portion of production units and small businesses offer their products and services to domestic consumers. This feature allows the economy to continue a large part of its activities based on domestic demand and not be dependent on foreign trade conditions. Alongside this, the continuity of banking services and the payment system enables households and businesses to carry out their daily affairs and keeps the internal exchange cycle active.
In this regard, Hemmati announced that providing foreign currency for essential goods and medicines is a priority for the Central Bank. The continuation of these services helps economic enterprises to maintain their activities and reduce the pressures resulting from sanctions.
Experience in Facing Sanctions
The long-standing experience of Iran's economy in facing sanctions is another factor that has contributed to economic resilience. Economic enterprises have found new methods for securing raw materials and selling their products over the years. For instance, in some industries, producers have turned to local manufacturing of parts and using alternative suppliers. This experience shows that Iran's economy has the ability to find practical solutions to external constraints.
The presence of skilled human resources and technical knowledge in various industries has significantly aided this process and demonstrates Iran's economy's capability to optimally utilize its capacities. Additionally, natural resources and mineral reserves, agricultural capacities, and basic industries are also considered as a backing for returning to economic growth.
Ultimately, Iran's economy possesses capacities that, if conditions improve, can become the engine for returning to growth. More effective use of these capacities depends on improving transportation infrastructure, access to export markets, and reducing production barriers.
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