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News: Iran Economy

Major Drop in Iran's Output According to New Report

Major Drop in Iran's Output According to New Report

By Mahmoud Hakamian

There was a major drop in Iran regime’s industrial output in 2018, according to a new report by the Islamic Republic Ministry of Industry, Mines, and Trade (MIMT).

In the 153-page report, published on June 3, the Ministry revealed that Iran’s production of various industrial commodities, including TVs, refrigerators, washing machines, air conditioners, vehicles, petrochemical and aluminium products have significantly dropped compared with the previous year. This is no doubt related to the US’s sanctions on the Iranian Regime that came into place in 2018 and 2019 after the US withdrew from the Iran nuclear deal.

These sanctions have made it hard for the Iranian regime to export products, repatriating profits, and even import machinery parts and raw materials needed for production.

The report shows that the manufacturing of passenger sedans – the main product of the auto industry in Iran- dropped 38% from 2017 to 2018. In 2018, only 884,000 sedans were made in Iran. While the manufacture of a number of other vehicles, including tractors and harvesters, has also dropped.

Meanwhile, petrochemical products, which account for 25% of Iran regime’s non-oil exports, saw a 1.3% drop, with its export volume limited to 52.8 million tons. Interestingly, a few years ago, the Iranian Regime boasted about a plan to double the volume of Iran’s petrochemical products by 2021; something that resurfaced recently with a new target date of 2024.

The report said that Iran regime had exported $32.3 billion in industrial products, including agricultural, petrochemical, liquid gas and natural gas condensates, in 2018. This is likely to go down even more in 2019, thanks to the expiration of sanctions waivers on Iranian oil that were given to eight countries last November and new sanctions that came into place this year.

The MIMT also said that between 2017 and 2018, the country’s exports of rugs, natural gas condensates, and minerals decreased by 34%, 30%, and 34.5% respectively.

While the Industrial Development and Reconstruction Organization of Iran (IDRO) released a report about Iran’s exports of iron and its alloys during the last Iranian calendar year (March 21, 2018 - March 20, 2019). It said the Iranian regime exported almost $700m of copper, as well as more than $840m iron ore, with other alloys making the total up to nearly $3.9 billion.

The IDRO says industrial metals account for roughly 14% of Iran’s non-oil exports and around 10% of Iranian workers are involved in metal-related industries, according to a report by Iran’s parliament.

It is as yet unclear how the sanctions will affect Iran’s miners, but given how sanctions are affecting Iran as a whole, it's likely that this will also go south for the Regime and encourage more people to take part in the anti-regime demonstrations.

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