Iranian official emphasizes importance of financing of production units
Date
7/24/2024 9:58:24 AM
(MENAFN) Majid Karimi, head of the Iranian Economy Ministry’s Production Financing Facilitation Center, emphasized that production-oriented investment and financing of production units are critical for achieving the country's ambitious 8.0 percent economic growth target. This target is part of Iran's 7th National Development Plan, which aims for an average growth of eight percent over its five-year period. In a televised interview, Karimi highlighted the essential role of capital formation and investment in productive sectors in meeting this growth objective, noting the direct relationship between financing and investment.
Karimi explained that economic financing can be sourced internally, from the profits of the entity itself, or externally, from both the banking system and the capital market. He pointed out that Iran's economic growth over the last decade has been below one percent, with a declining ratio of capital formation to the country's capital stock. To address these issues, the parliament and the government have developed new legal and executive frameworks to finance production, culminating in the drafting and approval of the production financing law.
The recently approved law, according to Karimi, is a crucial step in revitalizing Iran's economic growth. The Economy Ministry is now preparing the necessary infrastructure to fully implement this law. "When the law was approaching its final stages, the Ministry of Economy also updated its mechanism in accordance with that law in order to prepare for the implementation of this law and increase the required speed of action," Karimi stated.
The inauguration of the Economy Ministry’s Production Financing Facilitation Center took place in Tehran on Tuesday, attended by Economy Minister Ehsan Khandouzi. This center aims to streamline the approval and validation processes, the provision of facilities, and the supervision of these facilities throughout the country, ensuring that production units receive timely and accurate support.
Karimi's remarks underscore the government's commitment to overcoming past economic challenges by fostering a more robust and sustainable production financing framework. This initiative is designed to boost investment in productive sectors, ultimately driving the country toward its goal of sustained economic growth.
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