|Iran Macroeconomic Indicators|
|Publication Date: June 20, 2017|
*Note: Data are based on the Iranian calendar year where each month ends approximately on 20th day of the corresponding month in the Western calendar year. Month's numbers for these data are converted to the closest western month only for convenience
Inflation and Exchange Rate
Soaring within March and April 2017, Consumer Price Index (CPI) slid in May as is witnessed almost every year at the end of the current year and start of the new. The trend is projected to slow down in the coming months. In spite of the decreased monthly inflation rate, the Y-O-Y inflation and annual average have been on a slight upswing due to the rising trend of the past months.
Given reelection of the former government in the Iranian presidential elections, the inflation rate is expected to stay at the current range if the past monetary policies last. Considering the recession in industry and housing and the domestic banking financial structure challenges, the second half of the current year is expected to see expansionary policies and a higher inflation average.
As an indicator to determine the interest rate, the governmental T-bill interest rate was unrevised in May, despite a slight growth, from rates in March and April where it fell from 24% to 22.3% due to no new bills issuance. With no bills, the interest rate of bills is expected to keep up at the current range. However, the rates are projected to reach the previous levels for financing the government and issuing new T-bills on account of the government’s budget deficit and debts to various sectors such as the contractors.
Similar to the April trend in the past years, the Tehran residential apartment’s trades fell in April 2017 even more under the pre-election precautionary atmosphere. However, the trade volume increased after the April and took a trend like that of May 2016.
Owing to the return of house prices to pre-March levels, the rise and fall in April and May, respectively, could be left unnoticed. The rate of May signals a 5.7% growth compared with the similar period in the last year which, given a relative recession in the sector, is lower than the inflation rate and the bank interest rate.
Following reelection, the government is expected to maintain its previous housing related policies. The housing market trade volume is projected to go up slightly after the spring and also the holy month of Ramadan. The smaller and inexpensive apartments are expected to account for the majority of the aforesaid increase. Also, the prices are not predicted to see a growth rate higher than the current average owing to the sector’s recession and unimproved public purchase power.
the information in ragards import and export of May has not been published yet.
Before the presidential elections, prices soared in the equity market during April and May of which some are experiencing corrections. The equity market prices are not expected to significantly increase given the global commodity (including metals and petrochemical products) stability and rout in recent months, low inflation, stable dollar rate, and relatively high interest rate. Still, the expectations may be adjusted in the event of an increased average inflation rate in the second half of the year, global prices growth, or the declined bank interest rate. Watching constantly the abovesaid factors contributes to achieve a more precise outlook on the capital market future.
Assets' Returns (1 Year, Trailing)
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