Following the removal of unjust sanctions as part of a nuclear agreement with the six major world powers, which had negatively affected economy over the past decade, Iran's economy is on a flourishing trend these days.
Undoubtedly, Iran’s nuclear deal has launched a new chapter in the country’s economic prosperity and has paved the way for Iran to move quickly to economic growth and scientific development.
In an indication of booming Iran's economy, on the first say of the 2017 President Hassan Rouhani in a live TV program underscored that the government had decided to register five percent growth by the end of the Iranian calendar year started on March 20, 2016, reiterating that the growth in Iran's oil income, growth in agricultural products, cultivation of wheat, small-sized industrial, and the country's exports mainly in the first three months of the year the growth rate stood at 6.4 percent.
President Rouhani added the government must draw more foreign investment to increase rate of the country's economic growth and create more jobs.
He added in the second and third quarters of Iranian calendar year, the country have 7.4 per cent growth; in agricultural sector, this growth has been 5.6 per cent; in tourism.
Over 704,000 New Jobs Created
President Rouhani also reiterated that the government has created 704,000 sustainable jobs a year, adding that one million applicants come to the job market every year and that it is unfortunate that 300,000 job applicants remain unemployed every year.
President Rouhani said that the government encourages both the domestic investment and foreign investment to create sustainable jobs.
In the past two years, the number of employed people in Iranian year of 1392 was over 21.300 million and in the past two years the situation improved and the number now stands at 23 million which is remarkable.
The President said that a limited number of countries in the world could create about 600,000 jobs per year, so that Iran has created almost record number of jobs.
Export of non-oil products in the first six month of the current Iranian year was about $31 billion registering 10 percent growth compared with the preceding period.
The price of foreign currencies will not rise, he said.
Growth of foreign exchanges stood between four to five percent which is quite natural under the current circumstances, he said, adding that dollar gained against euro and UK pound sterling and it was the reason for fluctuation of rial against the dollar.
He promised to see stable foreign currency rates in the next few months.
IMF Expects 6.6% Economic Growth
Recently, the International Monetary Fund (IMF) has predicted that that Iran’s economic growth would reach as high as 6.6 percent for the Persian calendar year that started in March 2016.
On Dec 20, the IMF announced in a statement that higher oil production and exports would be particularly instrumental in boosting Iran’s economic growth that was in recession last year.
“Higher oil production and exports, after implementation of the JCPOA should allow real GDP growth to rebound to 6.6 percent in 2016/17,” the Fund added in its statement.
“Growth is projected to ease to 3.5 percent in 2017/18 as oil production normalizes and non-oil sector growth remains modest.”
The IMF further emphasized that it expects Iran’s average inflation to stand at above 9 percent for the current Iranian calendar year that ends in March 2017.
The IMF statement further added that Iran still needed to struggle to create the conditions for a sustained growth.
World Bank Forecasts 4.7% Economic Growth
In its June 2016 Global Economic Prospects report, the World Bank (WB) has suggested that Iran’s GDP would stand at 4.9 in 2017 and 4.4 in 2016.
In Iran, the combination of low oil prices and uncertainty surrounding the timeline for the lifting of sanctions slowed growth significantly, the report suggested.
According to the report, growth in the Middle East and North Africa was an estimated 2.6 percent in 2015, slightly down from 2.9 percent in 2014 and broadly in line with January estimates.
The report further added that the easing of sanctions has opened Iran to international trade and investment.
In April 2016, Iran’s crude oil production was 3.6 million barrels per day (mbd), 25 percent higher than average monthly production in 2015, and already at the upper end of the 0.5-0.7 mbd increase estimated last October for the post-sanctions period.
The post-sanctions era also holds strong promise for the Iranian financial services, mineral and metals, and manufacturing industries.
To the extent that higher Iranian oil production marginally reduces global oil prices, the impact of the country’s reintegration into the global economy is likely to be negative for other oil producing countries, including those in the Middle East, the report said.
The impacts of the Islamic Republic of Iran’s reintegration into the global economy through trade channels are more challenging to assess, but exports from the European Union to the Islamic Republic of Iran, for instance, stand to approximately double if they rebound to the levels seen prior to the tightening of sanctions in 2012.
Meanwhile the report highlighted that countries neighboring Iran may benefit from increased trade links and travel.
Highest Economic Growth in Region
In mid December 2016, Minister of Finance and Economic Affairs Ali Tayyebnia announced that Iran enjoys the highest economic growth in the region.
Tayyebnia said the Iranian government has been successful in dealing with the issue of inflation rate as it managed to lower the inflation rate to a one-digit figure.
According to a report by Central Bank of Iran (CBI), the economic growth in the country accelerated to about 9 during the second quarter of the Iranian calendar year started on March 20, 2016.
Economic growth was 5.4 during the first quarter of the year, the minister said, adding it indicated that the country is moving towards the right way.
Single Digit Inflation:
On June 2016, CBI announced that the inflation rate for the 12-month period ended in the last day of the third Iranian calendar month of Khordad (June 20) compared to the same period in the previous year hit 9.7 percent.
Meanwhile, Government Spokesman Mohammad Baqer Nobakht had put the figure at 9.5 percent.
He added the country has seen a decline in inflation figures during the past three years.
Nobakht also described the declining of country's inflation rate to a single digit as a great achievement.
He reiterated that the country's point-to-point inflation stood at 6.1 percent in the same period.
The inflation rate for the 12-month period ended in the last day of the second Iranian calendar month of Ordibehesht (May 20) compared to the same period in the previous year was 10.2 percent.
On June 14, Finance and Economic Affairs Minister Ali Tayyebnia had said the country planed to reduce the inflation rate to a single digit by the coming two months.
Curbing inflation was one of the major promises by President Rouhani during his presidential campaign. Under the previous administration, inflation skyrocketed to cross 44%.
Tayyebnia also noted that the government is to institutionalize growth in the country’s economy in a move to reach the five-percent economic growth which has been envisaged in the country’s budget plan for the current Iranian calendar year.
The official believes that removal of the West-led sanctions against Iran’s economy provides many opportunities for the country to achieve sustainable economic growth.