IMF Warning Over Iran’s Recovery

Amid the obligatory platitudes, the IMF’s latest Article IV report on Iran warns of the potential risks of a deterioration in relations with the US. This could undermine future growth prospects, and “deter investment and trade with Iran and short-circuit the anticipated recovery.”

President Donald Trump in his pre-election rhetoric called the nuclear deal which came into force last year a “disaster” and some Iranian officials are concerned that he may seek to revisit it. For now, this looks unlikely, but further easing of US restrictions looks unlikely over the next four years ( MEES, 10 February ).

In the Article IV report, the IMF notes that the Iranian economy continues to register solid growth in 2016-17 on the back of higher oil production, with real GDP growth expected to reach 6.6% in 2016-17 before easing to 3.3% in 2017-18. In the first half of fiscal 2016-17 GDP growth soared by 7.4%. However, the non-oil sector growth posted anemic growth of just 0.9% reflecting the ongoing difficulties “in access to finance and domestic financial sector and structural weaknesses.” (CONTINUED - 756 WORDS)