International Monetary Fund: Next Year Will Be 'Brighter' for Iran's Economy

The International Monetary Fund (IMF) in its latest report published on Monday evening, December 31, states that the next solar year will be 'brighter' for Iran's economy. This report, published on the official website of this international organization, adds that the sharp decline in global oil prices, the poor balance sheets of large companies and banks in Iran, as well as the delay in decisions regarding consumption and investment in anticipation of the lifting of international sanctions have led to a decrease in Iran's economic activity since last winter. According to this report, as a result, it is expected that Iran's economic growth will decline from 3 percent in 1393 (2014-2015) to around negative half a percent to positive half a percent in the current year. The IMF further states that point-to-point inflation has decreased to around 10 percent in recent months and is expected to reach about 14 percent by the end of the solar year. However, this international organization's report predicts that 1395 (2016-2017) will be a 'brighter' year for Iran. Based on this prediction, 'thanks to the lifting of international sanctions, increased oil production, reduced foreign trade costs and financial transfers, as well as access to Iran's frozen assets abroad,' Iran's economic growth rate is expected to reach about 4 to 5.5 percent in the next solar year. The report indicates that Iran's high economic growth is largely dependent on the increase in oil production. Iran's oil production before sanctions was around 3.7 million barrels per day and has now fallen to about 2.8 million. Iran claims that as soon as the sanctions are lifted, it will increase its production by half a million barrels and six months later will restore its oil production to pre-sanction levels. The IMF continues by stating that with reforms in economic policies, bank balance sheets, and the tax system, Iran's economic growth will stabilize in the medium term and progress around 4 percent. However, this report adds that to gain confidence in attracting investments and ensuring the maximum impact of the lifting of sanctions on Iran's economy, extensive reforms in the business environment are needed in the medium term.