Introduction
The
Iranian economy faced severe shocks due to the fluctuations in international
oil market on the one hand, and regional and international monetary and
financial crises on the other during 1997‑99, resulting in an unfavorable
financial condition for the government and imbalances in the external sector.
The unfavorable developments in oil market, which had adversely affected the
government budget and investment, showed its ;nflationary impact in the first
months of 1999/00. Following the successful measure adopted by OPEC members to
reduce crude oil production, which in turn resulted in a rise in crude prices
in international markets, the government financial situation improved in
1999/00, as compared with the previous year. With the implementation of
monetary policies aiming at controlling the liquidity and curbing inflation,
the inflation rate kept a downward trend and reached 20 percent in 1999/00.
The
developments in the current account of the balance of payments, owing to the
continued increase in international oil prices, brought about a surplus in
1999/00. This surplus created a favorable ground to reduce foreign obligations
to $ 10.4 billion and increase foreign exchange reserves.
National Income
On the basis of preliminary figures and production trend in
various economic sectors during 1999/00, GDP at constant 1982/83 prices,
excluding terms of trade effect, grew by 2.4 percent and amounted to Rls.
416,697 billion. It is estimated that due to increase in crude oil prices in
international markets and improvement in terms of trade effect, GDP growth
including terms of trade effect, will increase to 3.2 percent. This growth is
due to production growth in all sectors of the economy except agriculture and
oil sectors.
The
value‑added of agriculture group, which is highly responsive to climatic
conditions, registered 0.3 percent decrease, due to the severe drought and
decline in production of major crops especially wheat. In the oil group, the
rise in international crude oil prices was accompanied with reduction in crude
oil production and exports. The reduction in crude oil exports on the one hand,
and increase in production and exports of oil products on the other, resulted
in a one percent decline in the value‑added of oil group.
The
value‑added of manufacturing and mining group enjoyed a noticeable growth of
4.4 percent in 1999/00, compared with 0.1 percent growth in 1998/99, owing
mostly to the growth in the value‑added of construction sector by 12 percent.
It is to be noted that the value‑added of construction sector registered 10.6
percent decline in 1998/99, due to slump in construction activities. Figures
estimated for production in industry sector show that the value‑added of this
sector grew by 2.5 percent. The value‑added of services group is estimated to
grow by 4.3 percent, due to rise in the value‑added of transportation,
warehousing and communication sectors.
The
downward trend of gross fixed capital formation was reversed in this year and
enjoyed a growth of 8.2 percent, due to increase in the private and public
investment in construction. The share of gross fixed capital formation in GDP
remained constant at 22.1 percent in this year.
Private
and public consumption expenditures grew by 3.1 and 6.8 percent at constant
prices, respectively and its share in gross domestic expenditure reached 73.2
percent, against 72.2 percent in 1998/99. Due to the reduction in imports of
goods and services and increase in exports, the net exports grew by 10.3
percent at constant prices and amounted to Rls. 1,795 billion. Thus, according
to preliminary estimates, national income at current prices grew by 28.4
percent and per capita income reached Rls. 5,519 thousand in 1999/00,
registering a 26.4 percent growth compared with 1998/99.
The
agricultural products were struck severely by unfavorable climatic conditions,
thus bringing the value‑added of this sector down by 0.3 percent at constant
prices, which amounted to Rls. 4,321 billion in 1999/00. Production of most
crops (except sugar beets, sugar cane, tea, potatoes and onions) declined, and
production of grains (wheat, barley and rice) also registered 27.8 percent
reduction compared with the previous year and reached 13 million tons, owing to
a fall in rainfall by 37.6 percent compared with the previous year and by 26.8
percent compared to the average rainfall in the last 5 years. Wheat production
fell by 27.5 percent and reached 8.7 million tons. Production of barley and
rice declined by 39.4 and 15.3 percent respectively, owing to a drop in the
yield rate and area under cultivation of these products.
Production
of industrial crops (cotton, sugar beets, oil seeds, sugar cane and tobacco)
reached 8.5 million tons, showing 749,000 tons increase. Although, the area
under cultivation of most of these crops declined, the significant increase in
the yield rate per hectare of cotton, sugar beets, sugar cane and tea increased
the total production of these crops by 9.6 percent. According to the estimates
of the Ministry of Jahad Sazandegi, production of livestock products increased
by 335 thousand tons and reached 7.5 million tons, compared with the previous
year.
In
order to provide foodstuffs and regulate the market, the government imported
foodstuffs in this year. The noticeable decline in production of rice and wheat
increased imports of these products by 0.8 and 156.9 percent, respectively,
while imports of red meat fell by 61.3 percent and amounted to 24 thousand
tons.
To
encourage farmers to produce basic agricultural products, the guaranteed purchasing
price of all products except soya bean and sunflower increased by 12 percent as
compared with the previous year. In this year, about 14.4 percent of government
development expenditures (Rls. 4,721.6 billion) was allocated to expansion of
agriculture and water resources. Development expenditures allocated to the
expansion of agriculture and natural resources rose by 16.8 percent and reached
Rls. 1,238.8 billion. The greatest portion of national expenditures was
allocated to research on agriculture and natural resources, and water and soil
programs by 27.4 and 18.7 percent, respectively. Government development
expenditures allocated to the provision and expansion of water resources
increased by 144 percent and amounted to Rls. 3,482.8 billion, which made up
37.9 percent of total national budget allocation for water resource
developments.
The
bank facilities extended to agriculture sector rose by 49.2 percent and the
balance of these facilities amounted to Rls. 22,621.9 billion. The share of
commercial banks out of the total extended facilities increased to 41.9 percent
in 1999/00, while the share of Agricultural Bank decreased. Out of total
facilities extended by Agricultural Bank, 55.1 percent was financed by internal
resources of Agricultural Bank and the remainder was based on various notes of
Budget Law.
On the
basis of preliminary figures, the total subsidies paid for major agricultural
products amounted to Rls. 6,881 billion. The amount of subsidy paid for milk
and its products and wheat increased, while subsidies paid for sugar, vegetable
oil, rice and fertilizers decreased.
Energy
International crude oil prices, with a moderate and
continuous trend, increased since the beginning of 1999/00.
Improvement in world economic conditions which
brought about increase in world oil demand and the shortage in supply of oil by
800 thousand barrels per day (bpd) (against 1.6 mbpd excess of supply in the
previous year) followed by OPEC approvals to reduce oil production, resulted in
a rise in crude prices.
Based
on OPEC quota, set in 1999/00, Iranian crude production fell by 8 percent and
reached 3.4 mbpd, and crude exports declined by 9.6 percent and amounted to 2.1
mbpd. Domestic consumption of oil products fell by 9.6 percent, compared with
1998/99 and amounted to 1.1 mbpd. The average price for crude oil exports
reached 18.8 dollars per barrel against 10.5 dollars in 1998/99.
In order to
optimize domestic consumption of oil products, the price of oil products
increased in this year. The price of high octane gasoline, with a SO percent
increase amounted to Rls. 420 per liter, regular gasoline with a 75 percent
rise amounted to Rls. 350, gas oil and kerosene each by 66.7 percent increase
reached Rls. 100 and fuel oil with 66.7 percent increase amounted to Rls. 50
per liter.
Production
of natural gas went up by 10.3 percent and reached 80 billion cubic meters,
58.7 billion cubic meters of which was used for domestic consumption, 10.5
billion cubic meters for local consumption and 10.8 billion cubic meters was
flared. In this year, 24.6 billion cubic meters of natural gas was injected
into oil wells, registering a 1.2 percent reduction over 1998/99.
Production
of electricity in power plants affiliated to Ministry of Energy rose by 9.5
percent and reached 107.1 billion kwh, bringing the total production of
electricity to 112.5 billion kwh. The average price of each kwh of electricity
for household, industrial, commercial and general consumption increased by
22.9, 24, 22.2 and 0.9 percent, respectively. The consumption price of each kwh
of electricity in agriculture sector remained unchanged at Rls. 3.5 since
1994/95 till the end of 1999/00.
During
1999/00, Rls. 3,862.4 billion of government development expenditures was
allocated to electricity sector, 70 percent of which has been devoted to
production of electricity. About Rls. 155.6 billion of development budget
(approved) was allocated to research on energy, indicating a 15.2 percent
growth compared with the previous year.
Manufacturing and Mining
The
manufacturing and mining group enjoyed a relative growth in 1999/00 and its
value‑added increased by 4.4 percent, compared with 0.1 percent in the previous
year. The large amount of facilities extended by the banking system, together
with the increase in government expenditures and provision of foreign exchange
resources through the Tehran Stock Exchange (TSE) were among the factors
contributing to this growth.
In this
year, banks financed industrial units in the framework of obligations
stipulated in the budget and monetary policies. The balance of banking
facilities which are mostly extended by commercial banks to the non‑public
sector in the manufacturing and mining sector, grew by 29.9 percent and amounted
to Rls. 30.3 thousand billion. Total facilities extended by the Bank of
Industry and Mine grew noticeably by 295.9 percent and amounted to Rls. 458.8
billion.
The
data released by the Ministry of Industry for 1999/00 is indicative of the
private sector's tendency to expand its activities in the manufacturing sector.
In this year, 8,096 establishment permits were issued, projecting Rls. 28,980
billion investment and employment opportunities for 209 thousand persons in
various industrial fields. The composition of establishment permits issued in
various industry groups indicates that the greatest number of permits issued
was dominated by food and beverages group (22.7 percent), non‑metallic mineral
products (12.8 percent), rubber and plastic products (10.6 percent) and
chemicals and chemical products (9 percent).
In this
year, a total of 3,387 operation permits were issued with Rls. 10,330 billion
investment, creating job opportunities for 67.1 thousand persons in the
industry sector. The greatest number of operation permits was issued for rubber
and plastic products (18.7 percent), food and beverages (17.5 percent), non‑metallic
mineral products (9.8 percent) and textiles (8.8 percent), respectively.
According
to the Ministry of Industry, 2,295 new industrial projects with Rls. 5.5
thousand billion investment were put into operation, creating 44.8 thousand job
opportunities. The greatest share of these projects was related to food and
beverages and rubber and plastic products industries and the greatest number of
job opportunities was created by food and beverages and textiles groups.
Khorasan, Isfahan, and Tehran provinces recorded the greatest number, amount of
investment, and number of job opportunities created by these projects.
In the
area of industrial production, 72 percent of the selected industrial products
registered growth. In metal smelting industries, the production of raw steel
and steel manufacturing increased by 11.9 and 17.4 percent, respectively, with
aluminium production growing by 6 percent, which was due to the increase in
domestic demand resulted from relative boom in construction sector activities
and increase in exports of these products. However, the total copper extraction
declined by 1.5 percent as compared with the previous year and amounted to 26.1
million tons. Production of petrochemical products decreased by 1.2 percent. As
a result, the ratio of production to nominal capacity and the ratio of
production to approved plan fell by 3.9 and 5.6 percentage point compared with
the previous year and reached 80 and 90 percent, respectively. A noticeable
share of the total production of National Petrochemical Company was related to
production of Bandar‑e‑Imam, Razi and Shiraz Petrochemical Complexes.
In this
year, 9.6 million tons of industrial products valued at $ 1.4 billion was
exported, indicating 2.1 percent increase and 0.7 percent decrease in weight
and value, respectively. The positive performance of most industrial
manufacturing units resulted in an upturn in TSE activities, so that the share
price index of almost 90 percent of industrial units increased and the
industrial index rose by 52.5 percent.
Construction and Housing
Following
the downturn in construction activities during 1997‑99, the construction and
housing sector showed a remarkable improvement in 1999/00. The value‑added of
construction and housing sector at constant 1982/83 prices grew by 12 percent,
which was noticeable in comparison with 10.6 percent reduction in 1998/99.
Private sector investment in new buildings in urban areas grew remarkably by
29.1 percent against one percent increase of the previous year. Despite a
slight change in the composition of private sector investment in urban areas,
large cities and other urban areas enjoyed the greatest shares of 12.6 and 10
percent in the growth of the mentioned investment, respectively.
As a
result of credit policies adopted for the completion of semi‑finished buildings
in this year, the composition of investment according to the phases of construction
was directed towards completed buildings and with a rise of 43.2 percent had
the greatest share in the growth of private sector investment in new buildings
in urban areas. Investment in newly started and semi‑finished buildings also
grew noticeably by 28.9 and 23.9 percent respectively, against 0.8 and 2.9
percent reduction in 1998/99.
In
1999/00, number of construction permits and estimated floor‑space grew by 4.5
and 21.9 percent with average floor‑space growing by 16.9 percent. The trend of
seasonal changes in the number and floor‑space of buildings in Tehran shows
that the demand for establishing new buildings had an increasing pace since the
fourth quarter of 1998/99 till the fourth quarter of 1999/00. This trend has
been positive in other urban areas, especially in large cities. Number and
floor‑space of buildings in Tehran grew by 73.2 and 89.7 percent, respectively.
Effective
demand for construction materials raised the wholesale price index of
construction materials, so that the growth of this index increased from 2.8
percent in 1998/99 to 23.6 percent in 1999/00. However, increase in the price
index of construction services remained almost at the previous year's level of
13 percent.
The
outcome of credit policies to activate the construction and housing sector in
the last two years was reflected in the positive trend of most indices of this
sector. The balance of banking facilities extended to the private sector for
construction and housing increased by 39.5 percent and amounted to Rls. 32.8
thousand billion. About 45.2 percent of the change in the balance of facilities
was related to Housing Bank and the remainder to commercial banks' credit
performance.
The
Housing Bank extended 285.2 thousand facilities at Rls. 9,452.7 billion in 1999/00.
Number of facilities extended by this bank fell by 9.7 percent, while the
amount of facilities increased by 45.7 percent due to the rise in the ceiling
of facilities.
The
government allocated Rls. 2,203.1 billion of the total development budget to construction,
housing and urban development, showing 52.2 percent increase compared with the
1998/99 budget. More than 25 percent of this amount was allocated to the
provision of housing, indicating a noticeable growth of 132.7 percent compared
with the previous year, the major part of which was the credit granted in the
form of subsidy to support housing sector.
Government Budget and Finance
Prudent
budgetary management in 1999/00, along with the increasing trend of
international crude oil prices at the beginning of this year, improved the
budget performance favorably. Thus, the price of crude oil, set at $ 11.8 per
barrel at the time of the approval of budget law, reached $ 25.4 in February, 2000
and averaged $ 18.6 during 1999/00.
With
the increase in the revenue received from oil, according to the budget
amendment, the government was allowed to amend revenues and current and
development expenditures of the budget law, observing the budget notes,
provided that the government general budget would not increase. The most
important part of this amendment was the increase in the revenues received from
sale of foreign exchange by Rls. 11,122.7 billion, and a decrease of the same
amount in other items of government general revenues.
In
1999/00, government general revenues, with a 72 percent rise compared with the
previous year, reached Rls. 92,469.8 billion, which was realized by 98.2
percent of the approved budget. The composition of government revenues was
changed as compared with the previous year, and the share of oil revenue
(excluding the revenue received from sale of foreign exchange) reached 28.1
percent, against 30.9 percent in the previous year, and the share of tax
revenues fell from 34.7 percent to 27.9 percent. The share of other revenues
went up from 34.4 percent to 44 percent, owing mostly to the increase in the
share of revenue received from the sale of foreign exchange from 11.2 percent
to 20 percent of the total government revenues in this year.
Oil and
gas revenues, with 56.4 percent rise compared with the previous year reached
Rls. 25,955.4 billion, realizing 22.7 percent more than the approved budget.
With the inclusion of revenue received from the exchange rate differential, the
share of oil revenues went up from 42.1 percent to 48.1 percent in 1999/00.
Tax
revenues, with 38.2 percent growth compared with the previous year, reached
Rls. 25,831.4 billion, showing a 13.2 percent underrealization compared with
the approved budget. The composition of government tax revenues indicates that
64.2 percent of revenues was related to direct taxes and 35.8 percent to
indirect taxes, showing 30.8 and 53.9 percent increase, respectively compared
with 1998/99. During this year, receipts from tax on corporations and income
tax made up 59.7 percent of the total tax revenues.
The
revenues received from tax on imports went up by 31 percent, compared with the
previous year and was realized 22.3 percent less than the approved budget,
owing mostly to the reduction of import of some items whose import requires
payment of order registration fees, customs duties and commercial profit. Tax
on consumption and sales was also underrealized in 1999/00 compared to the
approved budget due to the non‑fulfilment of revenues from tax on imported
cigarettes and tax on sales of non‑alcoholic beverages.
Other
government revenues amounted to Rls. 40,683 billion in 1999/00. Despite the
120.2 percent rise in other government revenue, the actual performance of this
item was 6 percent below the approved figure. In this government revenue
category, 45.6 percent was mobilized from exchange rate differential revenues,
and 27.7 percent from fees on the expansion of industries went to the Treasury.
Funds received from public corporations, receipts from external facilities, and
excess provincial revenues, subject of Note 45 of the Budget Law were
underrealized in 1999/00.
Government
general expenditures, with a rise of 34.2 percent compared with the previous
year, amounted to Rls. 95,210.7 billion, showing 96.3 percent realization as
compared to the approved budget. In 1999/00, current expenditures constituted
71.4 percent of government expenditures and with 27 percent rise amounted to
Rls. 68,009.2 billion, showing 3 percent more realization than the approved
figure. Government development expenditures was underrealized by 17.1 percent
in this year. It is to be noted that development expenditures in 1999/00
increased by 56.1 percent, against 14.9 percent decrease in the previous year.
Out of total government expenditures, Rls. 74,802.6 billion (78.6 percent) was
allocated as national expenditures and Rls. 20,408.1 billion (21.4 percent) as
provincial expenditures, showing respective rises of 44.3 and 6.7 percent
compared with the previous year.
Government
budget deficit reached Rls. 2,740.9 billion in 1999/00, which was financed
through cash returns to the Treasury, prepayments and other accounts, issuance
of participation papers and other sources. However, considering the increase in
balance of foreign exchange obligations account by Rls. 1,812.6 billion,
government budget deficit amounted to Rls. 4,553.5 billion.
Balance of Payments
Improvement
in world economic conditions and developments in international crude oil market
have contributed positively to external sector of the economy in 1999/00.
Increase in export proceeds brought about a positive trade balance on the one
hand, and a reduction of external obligations, on the other.
A
noticeable rise of 78 percent in the price of crude oil per barrel raised the
export revenues, so that the oil export proceeds, with 63.8 percent growth,
increased from $ 9.9 bilLon in 1998/99 to $ 16.3 billion in 1999/00. Similarly,
the non‑oil export increased in this year by 8.5 percent, compared to the
previous year, and reached $ 3.4 billion. In the same period imports decreased
by 5.4 percent and amounted to $ 13.5 billion from $ 14.3 billion in 1998/99.
The compression in imports compared to a significant rise of exports led the
trade balance to face a surplus of $ 6.2 billion.
The
current account balance faced a $ 4.7 billion surplus in 1999/00 which paved
the way for the repayment of external obligations and increase in foreign
exchange reserves. In this period, $ 633 million foreign capital was absorbed
within the framework of buyback agreements and $ 677 million and $ 2,397
million were respectively allocated for the repayment of external debt and
purchase of foreign assets, in the form of short‑ and long‑term capital. Thus,
the net capital account of balance of payments faced a deficit of $ 3,074
million. However, $ 1,845 million was added to the country's foreign reserves
in the same period.
According
to the data released by the Customs, about 17.6 million tons of non‑oil goods,
valued at $ 3,362 million was exported which showed 21.5 and 11.6 percent
increase in weight and value as compared to the previous year. Taking into
account the exports from border markets, the value of non‑oil exports reached $
3,595 million in 1999/00. Increase in the value of non‑oil exports was mainly
due to the rise in the export of agricultural and traditional goods, especially
carpet with 21.2 percent.
During
this year, about 21,549 thousand tons of goods valued at $ 12,683 million were
imported, which despite 32.2 percent increase in weight faced an 11.5 percent
decline in the value. The value of import of raw materials and intermediate
goods, with 1.3 percent reduction compared to the previous year, reached $ 6.2
billion. Import of capital and consumer goods, in this period, fell by 24.9
percent and 3.1 percent, respectively. Thus, the composition of import was
changed towards raw materials and intermediate goods.
In
order to create stability in foreign exchange market, promote the non‑oil
exports, and prevent the weakening of the competitiveness in international
market, measures were taken in the foreign exchange market. The main objective
of the implementation of these policies was to make the exchange market more
flexible, to prevent the unreasonable exchange rate fluctuations and to provide
more reliable and long run strategies to expand production and investment. The
major part of reform policies proposed for the improvement of foreign exchange
structure was based on the policy guideline originated from "Economic
Revitalization Plan" which is being implemented now. In line with the
mentioned policies, special bonuses have been extended to the non‑oil
exporters, i.e. granting special facilities to settle their surrender
requirements, especially reducing the base rate for evaluating the surrender
requirement for many exports and utilization of the export proceeds for
imports.
Owing
to large increase in foreign exchange revenues in 1999/00, the foreign exchange
obligations was reduced by 10.3 percent at the end of the year compared to the
beginning of the year and reached $ 21 billion. In this period, the stock of
external debt also fell by 26 percent and reached $ 10,357 million and the
share of short‑ and long‑term debts out of total were 35 and 65 percent,
respectively and did not change significantly compared to the beginning of the
year.
Money and Banking
The
monetary and credit policies were implemented with the aim of mopping up the
large liquidity overhang resulting from the end of the previous year's
budgetary operation. Utilization of indirect monetary instruments is the
significant characteristic of these policies. Thus, a new instrument known as "Banks'
Open Deposit Account" held at the Central Bank was introduced to absorb
the excess resources of banks through using profit rate mechanism. In this
year, the application of direct bank credit ceilings for liquidity control was
abolished for the second consecutive year. The allocation of more credit and
facilities to the construction and housing sector to complete the semi‑finished
housing units was among other dimensions of monetary and credit policies.
Similarly, an attempt was made to increase the share of non‑public sector from
increase in the outstanding of bank facilities.
In
accordance with Paragraph B, Note 3 of the 1999/00 Budget Law, the Central Bank
was obliged to regulate the credit plan and facilities of the banking system on
the basis of the amount of deposits after observing the legal obligations in
order to achieve the target rate of liquidity growth and inflation as
stipulated in the SFYDP and to fulfill the needs of the non‑public sector and
efficient public productive units.
In
1999/00, there was no significant changes in the relative share of increase in
the balance of bank facilities extended to the non‑public sector in various
economic sectors, in profit rates for different term investment deposits, and
the expected rates of return on facilities extended to different sectors of the
economy and the rates of legal deposits, which remained at the same level as in
1998/99. Moreover, on the basis of the Budget Law, the increase in the balance
of scheduled facilities of banks in 1999/00, observing other obligations as
stipulated in the Plan was permitted up to Rls. 6,000 billion. The share of
public and non‑public sectors in this regard was determined at Rls. 1,740 and
4,260 billion, respectively. However, due to the drought, Rls. 1,200 billion of
agriculture sector's indebtedness to banks was rescheduled with the approval of
the Cabinet.
Owing
to non‑reliance on bank financing of budgetary operation due to full
performance of the government budget revenues during this year, favorable
condition was created to control the liquidity, curb the inflation and
inflationary expectations.
The
monetary base was increased by 15.9 percent due to the remarkable rise in the
Central Bank's claims on banks and increase in the net foreign assets of the
Central Bank. Simultaneously, the money multiplier increased from 2.59 at the
end of the previous year to 2.68 at the end of 1378 (1999/00). The simultaneous
increase in these two factors caused the liquidity to increase by 20.1 percent
compared to 1998/99 and reach Rls. 192,689.2 billion.
Among
the factors affecting the liquidity growth in 1999/00 was the noticeable share
of 17.7 percentage point of the net domestic assets. Among the factors
constituting the domestic assets, the claims on the non‑public sector had the
highest share of 19.8 percentage point in the expansion of liquidity. However,
the net public sector indebtedness, due to chanelling of the flow of bank
facilities to the non‑public sector, has had a negative impact on liquidity
growth. Moreover, due to the significant improvement in the foreign assets
position of the banking system, the increasing effect of this factor in the
liquidity growth has been 2.5 percentage point.
The
share of quasi‑money in the composition of liquidity increased from 53.4
percent to 55 percent, which was mainly due to the increase in the share of
term‑investment deposits.
The
balance of sight and nonsight deposits have registered growth of 15.4 and 23.7
percent, respectively compared to 16.9 and 20.6 percent in the previous year,
indicating reduction in the growth rate of sight deposits. In this year, the
share of notes and coins with the public in liquidity was limited to 11.5
percent compared to 1998/99.
|
(Billion rials ) |
End Year Balance |
1999/00 |
|||||
|
1997/98 |
1998/99 |
1999/00 |
Change in the balance |
% Change |
Share in the growth (Percent) |
||
|
Monetary base |
52,513.5 |
61,964.6 |
71,822.6 |
9,858.0 |
15.9 |
15.9 |
|
|
Net foreign ssets |
5,941.9 |
2,465.4 |
4,449.8 |
1,984.4 |
80.5 |
3.2 |
|
|
Net claims on public sector |
45,003.8 |
54,042.5 |
53,980.1 |
‑62.4 |
‑0.1 |
‑0.1 |
|
|
Central Bank's claims on banks |
14,929.8 |
13,399.8 |
0,811.0 |
7,411.2 |
55.3 |
12.0 |
|
|
Other items (net) |
‑13,362.0 |
‑7,943.1 |
‑7,418.3 |
524.8 |
6.6 |
0.8 |
|
|
Liquidity |
134,286.3 |
160,401.5 |
192,689.2 |
32,287.7 |
20.1 |
20.1 |
|
|
Net foreign assets |
8,195.3 |
‑635.6 |
3,329.4 |
3,965.0 |
|
2.5 |
|
|
Net domestic assets |
126,091.0 |
161,037.1 |
189,359.8 |
28,322.7 |
17.6 |
17.7 |
|
|
Net claims on government |
37,141.2 |
49,196.9 |
48,807.0 |
‑389.9 |
‑0.8 |
‑0.2 |
|
|
Net Claims on public institutions &
corporations |
29,100.7 |
39,416.1 |
42,656.8 |
3,240.7 |
8.2 |
2.0 |
|
|
Claims on non-public sector (1) |
62,321.2 |
84,073.0 |
115,840.9 |
31,767.9 |
37.8 |
19.8 |
|
|
Other items (net) |
-2,472.1 |
-11,648.9 |
-17,944.9 |
-6,296.0 |
-54.0 |
-3.9 |
|
1-
Excludes profit and revenues receivables.
In
1999/00, Central Bank's claims on government increased by Rls. 3,464.9 billion
(5.9 percent) and reached Rls. 62,058.5 billion, 57.1 percent of which, i.e
Rls. 35,446.1 billion was related to the deficit of "foreign exchange
obligations account". Nevertheless, banks' claims on government, with 7.6
percent reduction, reached Rls. 7,151 billion. Similarly, the Central Bank's
claims on public corporations and institutions decreased to Rls. 13,808.4
billion at the end of 1999/00. Considering the banks' claims on public
corporations and institutions, the total indebtedness of these institutions to
the banking system reached Rls. 47,907.4 billion.
The
credit performance of banks in 1999/00 indicates that total facilities extended
by banks and non‑bank credit institutions to the non‑public sector, excluding
the profit and revenue receivables increased by 37.8 percent and reached Rls.
115,841 billion. The balance of specialized banks' claims increased by 39.4
percent in this year. It is to be noted that non‑bank credit institutions
started their activities under the supervision of Central Bank in this year and
the balance of their claims on the non‑public sector reached Rls. 208 billion
at the end of the year under survey.
The
Central Bank's claims on banks, with 55.3 percent increase, amounted to Rls.
20,811 billion, while the total deposits of banks held with the Central Bank
grew by 14.6 percent and reached Rls. 47,908.9 billion.
The
balance of facilities extended in the framework of budgetary notes reached Rls.
33,355 billion at the end of 1999/00, registering a rise of 34.4 percent
compared to the end of the previous year. About 57.2 percent of the balance of
the said facilities was related to facilities extended to the non‑public
sector. However, the share of commercial banks out of these facilities was 76.6
percent.
The
increasing trend of the Tehran Stock Exchange activities which had started
since 1998/99, continued in 1999/00. Although the volume of stock exchange
transactions declined in number of shares by 2.4 percent in this year and
reached 1,182 million shares, the value of transactions increased noticeably by
65.4 percent compared to the previous year. Moreover, as a result of increase
in the current value of shares issued, the share price index also changed and
grew by 43.4 percent as compared with the end of the previous year.
The
average daily number and value of shares transacted were 4.9 million shares and
Rls. 21.6 billion respectively, showing a reduction of 2 percent and a rise of
66.2 percent respectively, compared to 1998/99.
In this
year, the value of transactions of most active industries listed on the TSE (72
percent of industries) increased as compared to the previous year and the
highest increase was related to "transportation equipment" industry
which grew by 1,222.6 percent. Among the industries which faced reduction in
the value of transactions was "mine extraction" industry which showed
92.6 percent reduction.
The
share price index increased significantly by 43.4 percent and reached 2,206.19
at the end of 1999/00, from 1,537.96 at the end of 1998/99. It is to be noted
that the industrial index which faced a reduction of 8.5 percent in 1998/99,
showed a rise of 52.5 percent in 1999/00. The highest increase in the share
prices was related to the index of "oil refined products" industry,
growing by 76.7 percent and the share price index of "electric devices and
machinery" industry by 61.7 percent.
In this
year, a total of 242.7 million shares valued at Rls. 2,034.8 billion were
offered on the TSE by public corporations and institutions, showing an increase
of 72.5 percent in value, despite a 55.7 percent decrease in number, as
compared to the previous year. The "Industrial Development and Renovation
Organization", offering 143.3 million shares, valued at Rls. 1,571.4
billion, registered the greatest number of shares.
On the
basis of Note 85 of SFYDP Law, buying and selling of participation papers is
permitted either directly or through the TSE. The only participation paper
transacted in the Stock Exchange was related to participation papers of
hospital projects. In 1999/00, 286 participation papers related to hospital
projects, valued at Rls. 37.5 billion were transacted, showing a reduction of
81.8 and 87.9 percent in number and value respectively, as compared with the
previous year.
Number
of listed companies reached 295, which exceeded the number of companies in the
previous year by 14 companies. Thus, the number of accepted companies on the
Stock Exchange including companies registered, companies in abeyance and companies
accepted conditionally increased from 304 to 311 at the end of 1999/00.
Price Trends
The
average growth rate of consumer price index increased in the first quarter of
the year, due to lagged effects of unfavorable conditions of the balance of payments
and liquidity growth, so that inflation rate reached 22.9 percent at the end of
the first quarter of 1999/00 against 20 percent at the end of 1998/99. However,
it took a downward trend and reached 20.4 percent at the end of 1999/00.
The
wholesale price index and producers price index increased by 23.1 and 21.7
percent respectively, against 11.6 and 17.8 percent at the end of 1998/99.
The
increase in inflation rate was mainly reflected in the index of "food,
beverages and tobacco" group. Increase in the indices of "red meat,
poultry and fish" and "fruits and vegetables" made up 54.9
percent of the increase in the said index and accounted for 24.5 percent of
increase in the general consumer price index.
During
this period, increase in the indices of "domestically produced and
consumed goods" and "imported goods" made up 56.3 and 23.9
percent of increase in the general wholesale price index, respectively. As a
result, increase in growth rate of the index of "goods" in consumer
price index is justified by the 22 percent average growth of the index of
"domestically produced and consumed goods". The direct effect of
growth of index of "goods" in the increase of consumer price index
increased to 12.5 percent against 11.8 percent in 1998/99 and led to a rise in
the inflation rate by 0.4 percentage point.
Among
the components of the producers price index group, index of "industries
and mines" grew by 21.1 percent and made up 48.4 percent of increase in
the general producers price index. Index of "manufacturing" group
grew by 20.8 percent, and with a remarkable relative weight of 45.14 percent
had a direct effect of 9.7 percentage point in the rise of general producers
price index. Index of "services" group, with an average growth of
17.6 percent and relative weight of 28.24 percent had the lowest direct effect
of 4.5 percentage point in the increase in general producers price index. It is
expected that the positive effects of improvement in the balance of payments
position and narrowing the government financial gap on price trends in 1999/00
will be reflected in 2000/01.
|
CENTRAL BANK OF THE ISLAMIC
REPUBLIC OF IRAN ( BANK MARKAZI JOMHOURI ISLAMI IRAN
) Prepared by : Economic Research Department
Central
bank of the Islamic republic of Iran
P.O.Box 1549633111, TEHRAN, IRAN |