Economy, Domestic Economy

Economy Growing Despite Sanctions

Economy Growing Despite Sanctions
Economy Growing Despite Sanctions

Iran’s economy should continue to grow even if the US-led sanctions remain in place, the central bank governor has said.

The economy is projected to grow by 3 percent this year, Valiollah Seif, governor of the Central Bank of Iran, said in an interview in Washington, adding that the economic situation is already on the mend.

The P5+1 group of major world powers are negotiating a ‘permanent’ deal that would see Iran curb its nuclear program in exchange for looser economic sanctions. A senior member of Iran’s negotiating team said on Sunday that talks may be extended again if the agreement is not reached on the November 24 deadline.


“Our current economic policy is based on the fact the sanctions will remain in place, so this is a given assumption,” Seif said. “Obviously, if sanctions are removed, we would experience much better results.”

In its recent World Economic Outlook, the International Monetary Fund has projected that Iran’s economy will grow 1.5 percent this year, followed by a 2.3 percent growth in 2015.

The CBI is targeting an inflation rate of 17 percent this year and 14 percent in 2015. By 2016, the bank hopes price growth will fall to the single-digit range, said Seif. The Washington-based lender expects Iranian inflation to average 23 percent this year and 22 percent in 2015.

Last week, Minister of Economy Ali Tayebnia said inflation is likely to fall below 20% by March 2015, down from slightly more than 20% now.

Inflation hit 40% last summer but it later fell down to 34.7% at the end of last fiscal year (March 20, 2014) thanks to the Rouhani administration’s monetary policy and its interim nuclear deal with the P5+1, which eased sanctions against Iran’s economy.

Asked about his expectations from the ongoing talks over Iran’s nuclear program, Seif said, “This is a question for the diplomats. Bankers plan for the worst, and hope for the best.”