EghtesadOnline: The Iranian government is extending financial support to tackle industrial recession.
According to Minister of Industries, Mining and Trade Mohammad Shariatmadari, the government is providing 300 trillion rials ($7.5 billion) to renovate industrial units and promote production in the current Iranian year (ending March 20, 2018), IRNA reported.
This is while President Hassan Rouhani’s first administration (2013-17) pursued the same policy by allocating huge amounts of finance to reinvigorate low-functioning, half-idle factories.
In January 2017, it was announced that 20,000 industrial units had emerged from recession since March 2016, according to Financial Tribune.
“About 140 trillion rials ($3.5 billion) worth of loans have been granted to small- and medium-sized enterprises for their reactivation,” deputy industries minister, Reza Rahmani, said.
The loans were part of a stimulus plan prepared by the government’s economic team, based on which loans worth 160 trillion rials ($4 billion) were to be given to struggling SMEs in the industrial and agricultural sectors.
Sonya Pouryamin, an advisor to industries minister, said the government has also helped revive factories whose production had stopped.
Some 88,000 manufacturing units are active in 992 industrial parks across Iran, which account for 42% of all employment in the industrial sector.
It is estimated that 96% of these businesses are considered small- and medium-sized.
By definition, enterprises run by 100 workers or less, and 50 workers or less are considered small- and medium-sized respectively, according to Iran’s Small Industries and Industrial Parks Organization.
According to the Central Bank of Iran, the “industry sector” expanded 6.9% last fiscal year—a remarkable improvement compared to the 4.6% contraction registered a year before.
The overall GDP growth for the period stood at 12.5%, including the growth in oil sector, and 3.5% without it.