Top banker: Iran can achieve 8% growth
Central Bank Governor Valiollah Seif says Iran’s economy has the potential to grow by eight percent over the next five years as the country gears up for the lifting of Western sanctions.
Since coming to office in 2013, the administration of President Hassan Rouhani has ridden out recession and presided over a growth rate of about 3% by following a tight monetary and fiscal policy.
"We believe that 3% growth is well below the economy's potential and that the economy has the capacity to achieve around 8% growth over the course of the current five-year development plan," Seif told a Frankfurt business forum on Wednesday.
Under President Rouhani, Iran has brought its inflation rate down to 15% from 40% at the beginning of his term.
Seif said, "The government has committed itself to a disciplined and transparent fiscal and monetary policy with a view to promoting growth and tacking high inflation."
Last month, the government unveiled a policy package in order to stimulate the stagnant economy through higher investment in production and boosting consumer spending.
A Washington-based finance industry body said last week Iran’s economic growth will outperform most of the Middle East and North Africa (MENA) countries in 2016 when sanctions are lifted.
According to the Institute of International Finance (IIF), Iran will post 6% growth next year up from 1.4%.
The International Monetary Fund (IMF) has also said the Middle East and North Africa are set to benefit from Iran’s nuclear agreement, lifting economic growth in the region next year.
In its biannual World Economic Outlook, the IMF said growth will “pick up substantially in 2016, supported by accelerated activity in the Islamic Republic of Iran” which is the Middle East’s second largest economy.
Meanwhile, International credit rating agency Capital Intelligence revised up its outlook on Iran’s sovereign ratings to “stable” from “positive”.
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