April 20, 2018 18:42

World Bank: Iran’s Growth to Stabilize Above 4 Percent

The Iranian economy is expected to maintain a steady growth of slightly over 4%, increasingly based on non-oil sectors and fueled by a recovery in consumption and investment demand and overtaking the contribution of net exports

The World Bank believes lack of job creating growth will continue to pose an important challenge to Iran.

In the medium term, inflationary pressures are likely to increase due to widening output gap and further currency depreciation, pushing CPI inflation into double-digit territory again

As the impact of the previous year’s boost in oil production and exports dissipates, Iran's overall growth rate is expected to stabilize at around 4.2%, with a larger contribution from the non-oil sector.
Yet, continued high unemployment rate and an expected upward trend in prices are likely to put pressure on household incomes and complicate the space to implement further economic reforms, reads the World Bank's latest report on "Iran's Economic Outlook". Excerpts follow:
(Note: This World Bank report draws on the latest statistics available at the time of compilation. More up-to-date data have been provided by Iranian sources ever since on several macroeconomic indices, such as growth and unemployment.)

> Recent Developments
Real GDP growth at factor prices is expected to moderate from 12.5% in 2016-17 to 4.3% in 2017-18 as oil production stabilizes.
Unlike in 2016-17, the non-oil sector was the main contributor to the overall growth in the first half of 2017-18 (by 3.2 percentage points of the overall 4.5%). Gross fixed capital formation recorded a positive growth rate for the first time since the second half of 2014-15, driven mainly by a pickup in investments in the construction sector. This was supported by a 20% growth in outstanding loans as of December 2017, compared to December 2016.

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