Iran’s economy improving 'substantially' in 2016/17: IMF

October 4, 2016 - 18:11

TEHRAN- The International Monetary Fund (IMF) released a statement on Monday saying that economic conditions are improving substantially in Iran in 2016/2017 and real GDP rebounded strongly over the first half of the year as sanctions eased after the implementation of Joint Comprehensive Plan of Action (JCPOA).

The concluding statement described the preliminary findings of IMF staff at the end of an official visit (mission) to Iran. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s executive board. 

The statement said, “Iran’s oil production and exports rebounded quickly to pre-sanction levels. Increased activity in agriculture, auto production, trade and transport services has led the recovery in growth in the non-oil sector.” 

It added, “Real GDP is projected to grow by at least 4.5 percent in 2016/2017. The prudent monetary and fiscal policies adopted in recent years, along with favorable international food prices, allowed CPI inflation to decline to a low of 6.8 percent (y/y, point-to-point) in June 2016.”

It also said that the Central Bank of Iran (CBI) has taken important steps over the past year to restructure and bring unlicensed financial institutions (UFIs) under its supervision, helping address an important source of financial instability.

Elsewhere the IMF statement commented that safeguarding the reduction in inflation will be essential to preserve the credibility of Iran’s reform efforts and ensure the planned unification of the exchange rate is durable. Adjustments in administered prices should be compatible with the objective of single-digit inflation.

IMF said that the mission would like to thank the CBI, government officials of Iranian National Tax Administration (INTA), the Management and Planning Office and other government agencies for their cooperation, frank discussions and generous hospitality.

Last year on July 14 Iran and six world powers – the U.S., Russia, China, England, France, and Germany - signed a historic agreement on Tehran’s nuclear program.

Under the deal, known as JCPOA, Iran was granted relief from international sanctions in exchange for a limit on its nuclear activities. The agreement went into effect on January 16 in the current year.