International Monetary Fund: Iran's Economic Growth Rate to Reach Four Percent in 2016

The International Monetary Fund (IMF) on Tuesday, April 24, predicted Iran's economic growth rate for 2016 to be four percent, stating that following the reduction of sanctions, this growth rate will reach 3.7 percent in the following year. The IMF reported that Iran's economic growth rate in 2015 was zero percent. In its report, the IMF announced the inflation rate in Iran's economy during 2015 to be 12 percent and predicted that this rate will decrease to 8.9 percent this year and to 8.2 percent in 2017. Meanwhile, the IMF painted a negative outlook for the unemployment rate in Iran for 2016, stating that this rate was 10.8 percent last year and will rise to 11.3 percent this year. According to this forecast, the unemployment rate in Iran will exceed 11.6 percent in 2017. Additionally, according to a report by AFP, the IMF has reduced its growth rate forecast for oil-exporting countries, including those in the Persian Gulf, Algeria, Libya, and Yemen, to 2.9 percent for 2016, down from 3.8 percent predicted in October of the previous year. These countries had an economic growth of 1.9 percent last year. The economies of oil-importing countries, including Egypt, Pakistan, and Tunisia, are expected to grow by about 3.5 percent in 2016, while the IMF's previous forecast for these countries in October was 4.1 percent. The growth rates of these countries show a decrease of three-tenths of a percent compared to last year. Oil prices, which reached $115 per barrel in June 2014, fell to $30 in February this year. The IMF expressed a pessimistic view regarding Saudi Arabia's economy due to the sharp decline in oil prices, predicting that its growth rate will reach 1.9 percent this year, the lowest level in seven years. This growth rate comes despite the austerity measures that Riyadh has taken to reduce costs and diversify its non-oil revenues. In 2015, Riyadh announced that its budget faced a deficit of $98 billion. The country has significantly reduced subsidies for oil products, electricity, water, and other services to address this budget deficit and rationalize their consumption. The IMF states that 'the rapid decline in oil prices has cast a heavy shadow over Saudi Arabia's macroeconomic outlook.' On the other hand, the rating agency Fitch has downgraded Saudi Arabia's long-term credit rating from AA to AA negative, stating that the economic outlook for the country is negative and that it may downgrade the country's rating again. In this context, the IMF has stated that with the implementation of the JCPOA (Joint Comprehensive Plan of Action), Iran's economic growth will become positive, and next year will be 'brighter' for Iran's economy. The global growth forecast has been reduced for the third time.