Was Everything Going Well Under Raisi's Government? Fact-Checking Abdolmaleki's Claim Against Official Statistics

Positive Economic Growth, Inflation Above 40 Percent, and a Dollar Price More Than Doubled: What Do Official Statistics Show About Hojjatollah Abdolmaleki's Claim That the Economy Improved Under Raisi's Government?

Hojatullah Abdul Maleki, the former Minister of Cooperation, Labor and Social Welfare in the government of Ibrahim Raisi, said in a video interview: "Everyone who sees me says that everything was going well during the late Raisi's time."

In another part of his statement, he emphasized: "In the economy, the issue is only inflation and inflation." "You leave the price aside, you don't have any economic problems anymore."

These statements raise two propositions that can be investigated: firstly, the claim of improving the country's economic situation in the 13th government and secondly, limiting Iran's economic problems to high prices and inflation.

To evaluate these claims, different economic indicators should be examined side by side; Because the growth of GDP alone does not indicate the improvement of living conditions, the increase of purchasing power or the resolution of the structural problems of the economy.

The background of Abdul Maliki's economic comments

Abdul Maliki is also known for his controversial economic comments. From claiming the possibility of creating a job with one million tomans to his words in Farvardin 1400 about foreign investment and the construction of a Lamborghini by five young Iranians.

In August 1405, in response to the wave of price hikes, he claimed that "the price hikes are not even one percent related to the war" and the increase in prices in recent months has nothing to do with the war. Abdolmaleki emphasized this claim by referring to his academic background, membership in the economic team of the 13th government and participation in the market regulation headquarters.

In another comment, the former labor minister attributed the growth of South Korea's automobile industry to the small size of the garage doors of houses in this country. According to him, these doors are designed so small that large American cars cannot pass through them, and this is what drives Korean citizens to buy domestically produced cars.

Abdul Maliki also responded to the criticism of the economic consequences of the Internet outage and said: "Nobody has been unemployed because of the Internet outage." He believed that online sellers can transfer their activity to internal platforms; While transferring the activity to another platform does not necessarily mean keeping the previous customers, income and job opportunities.

These comments are part of the background of Abdul Maliki's economic positions, but in verifying his new claim, the criterion of judgment is not the records of his comments, but statistical data and evidence.

review method; What indicators are criteria?

In order to measure Abdul Maleki's claim, the statistics published by Iran's Statistics Center and Central Bank on economic growth, inflation and price changes have been examined. Also, changes in the dollar rate in the free market and other important components of economic performance evaluation have been taken into consideration.

In this study, a distinction has been made between economic growth and general improvement of living conditions. An increase in GDP can be a sign of growth in economic activity, but to conclude about the improvement of the overall economy, other indicators such as inflation, employment, investment, productivity, poverty, income distribution and household purchasing power should also be considered.

first review; How much did the economy grow in 1401?

According to the statistics of Iran Statistics Center, the country's economic growth in 1401 including oil was 4.8% and excluding oil was 4.5%.

In the same year, private final consumption expenditure increased by 6.7%, government final consumption expenditure by 5.8% and gross fixed capital formation by 2.1%. Also, the export of goods and services grew by 24.6% and the import of goods and services grew by 9.3%.

These data show that Iran's economy experienced positive growth in 1401. Therefore, the existence of economic growth this year cannot be ignored.

However, positive economic growth does not mean an automatic increase in the purchasing power of all households or the elimination of economic problems. Production growth and people's well-being are two related, but different issues, and to check their relationship, one should refer to additional indicators.

second review; What was the inflation situation in the 13th government?

The statistics of the Iranian Statistics Center show that the annual inflation rate reached 40.2% in March 1400. This rate increased to 45.8% in March 1401 and reached 40.7% in March 1402.

Therefore, although the annual inflation at the end of 1402 decreased compared to the end of 1401, it still remained at a high level of 40%.

The important thing is that the reduction of inflation rate does not mean the reduction of prices of goods and services. When the inflation rate is positive but decreasing, the average price level continues to increase, but the rate of increase decreases.

Therefore, the reduction of the inflation rate in a period cannot be considered as the same as reducing the cost of living or improving the purchasing power of households.

third review; The jump in prices after the change of the preferential currency policy

One of the important periods of inflation in the 13th government was May and June 1401; When the preferential currency allocation policy of 4,200 Tomans was changed.

In this period, a cash subsidy of 400,000 Tomans per month was given to eligible people in the first to third deciles and 300,000 Tomans per month for the fourth to ninth deciles.

However, the statistics of the Iranian Statistics Center show that the monthly inflation reached 12.2% in June 1401 and the point-to-point inflation reached 52.5%. The monthly inflation of food, beverages and tobacco was also announced at 25.4%.

These figures indicate a sharp increase in the level of prices, especially in the food group, at that time.

The central bank also announced the monthly inflation rate of consumer goods and services price index in June 1401 equal to 10.6% in the report on macroeconomic developments. This rate decreased to 4.3% in July of the same year and to 2.4% in August.

The statistics of the Central Bank and the Statistics Center of Iran are calculated based on different indicators and statistical methods, and their figures should not be directly replaced without considering these differences.

Despite this, both sets of statistics show a sharp increase in prices in June 1401 and a decrease in the rate of monthly price growth in the following months.

fourth review; What did the price of the dollar change?

The exchange rate is another indicator that is important to evaluate the economic developments of the studied period.

The price of the dollar in the open market in August 1400 was about 26 thousand tomans. On the other hand, the historical data of the open market shows the average price of the dollar in May 1403 to be around 61 thousand 305 tomans.

Based on this, the comparison of these two figures indicates a 136% increase in the price of the dollar.

Of course, this calculation is based on the approximate dollar rate in one of August 1400 and its monthly average in May 1403. Therefore, these figures should not be presented as an exact comparison of the dollar price on the day of the beginning and end of the 13th government.

The increase in the exchange rate alone is not enough to judge all aspects of a government's economic performance, but along with inflation and other indicators, it shows part of the picture of the economic developments of that period.

fifth review; Are high prices and inflation the only economic problems?

Another part of Abdul Maliki's statement is that if inflation and inflation are removed, there will be no more economic problems.

This claim cannot be economically defended with a single indicator; Because inflation, although it is one of the most important problems of Iran's economy, does not include all economic issues.