The Research Center of the Iranian regime’s Parliament (Majlis) has reported a significant recession in the country’s industries during the first month of summer electricity supply restrictions. It states that in July of this year, industrial enterprises experienced a deeper recession in terms of production and sales indices compared to the spring season.
Data from the Majlis’s Research Center report shows that in the first month of this summer, the sales index decreased more than the production index, indicating a worsening crisis of effective demand in Iran’s economy.
The state-run newspaper Donya-e-Eqtesad, citing this report, wrote: “The continuation of the current situation will cause more enterprises to operate at half of their production capacity, which will gradually decrease, ultimately putting them at risk of closure.”
According to this report, in July 2024, the production and sales indices of stock-listed industrial companies not only decreased by 8% and 10%, respectively, compared to the previous month, but also dropped by 3.5% and 5.4%, respectively, compared to July of the previous year. This indicates that the industrial sector’s recession is due to factors beyond just the summer electricity shortages.
The recession in the industrial sector in July occurred while the electricity shortage in August and September is much more severe than in July. It is expected that industrial production and sales have plunged even further last month; indeed, in August this year, the stock market saw a decline in the balance index of 29 out of 30 major industries listed on the stock exchange.
As power outages continue in various cities across Iran due to electricity shortages, on Monday, July 26, a union official announced that power cuts in some industrial areas of Tehran have led to street protests.
Mehdi Bostanchi, the head of the Industrial Towns Coordination Council, wrote: “Yesterday, street protests occurred in the Khavaran Industrial Town due to power outage.”
Details from the Majlis’s Research Center report show that the pharmaceutical sector experienced a 17% decline in production in July.
In recent months, numerous reports have emerged about the dire state of the pharmaceutical sector, including large overdue government debts to this sector, insufficient allocation of foreign currency for importing raw materials for medicines, cash flow shortages in pharmaceutical companies, and even power outages affecting these facilities.
The food and beverage sector has also experienced a decline of over 10%.
The Majlis’s Research Center states that in July 2024, out of fifteen stock-listed industrial activities, only four saw an increase in the sales index, and six had an increase in the production index.
Central Bank data shows that last year, the industrial sector contributed only 0.7% to the 4.5% economic growth.
