Dollarization, energy subsidies, and sanctions: Iran’s main economic challenges and presidential election

In an economic roundtable hosted by the GPTT Economic Policymaking Department on June 24 at Sharif UT’s Graduate School of Management and Economics, representatives of three presidential candidates discuss the main economic challenges the next Iranian president will face. Masoud Pezeshkian’s representative mentioned the enormous amount of gasoline subsidies and the necessity of cutting these subsidies and at the same time, enhancing the quality of domestically-manufactured cars. He also emphasized the need for a deal with the West for the sanctions to be lifted. Mohammad Bagher Ghalibaf’s representative rejected the criticality of energy subsidy reform and instead pointed out the dependency of Iran’s economy on UAE currency and also the exclusiveness of livestock feed supply. He attributed the increase in Iran’s oil revenues to “geopolitical” realities and did not see any chance for meaningful negotiations with the West for the time being. Finally, Alireza Zakani’s representative stated that Iranian policymakers have failed to adequately invest in energy production, while they have not adopted necessary policies to manage consumption. According to him, in the first step of consumption management, household consumption and industrial consumption should be regarded differently. Households should be given an energy quota, so the less the household consumes, the more will be granted to it as savings.

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