Economy, Domestic Economy

GDP Growth to Reach 2% by March

GDP Growth to Reach 2% by March
GDP Growth to Reach 2% by March

President Hassan Rouhani's chief of staff has said the economy will reach the growth target of two percent by the end of this fiscal year (ending March 20, 2015).

Referring to reports that the economy grew by 0.5 percent in spring (the first quarter), Mohammad Nahavandian told FNA on Saturday that the economy is on the right track. 

Earlier this week, Mohammad Baqer Nobakht, vice president for planning and strategic supervision, announced that the economy had stepped out of recession.

"The government has been trying hard to reverse the negative trend of growth in recent months," he said at a press conference in Tehran. 

The annual growth rate stood at -6.8 in the year ending March 2013, climbing up to -2.2 percent by the end of last year (ending March 2014).

The Central Bank of Iran, the sole body in charge of releasing official data on macroeconomic indices, has not yet released the growth rate for the first quarter. But the International Monetary Fund has recently confirmed that the Rouhani administration managed to bring stability back to the economy in just one year. The IMF predicted that the country's annual growth will reach 1.5 percent by the end of this year.

Nahavandian said that the government had been successful in curbing inflation over the past year and "is now planning to achieve a single-digit inflation rate and a stable economy in two years." 

Inflation, which increased to 40 percent last summer, dropped to 32.1 in March 2014. President Rouhani has vowed to achieve the inflation target of 20 percent by the end of this fiscal year, revising down from 25 percent announced earlier. 

Earlier in the week, Ali Tayebnia, minister of economy, said that the government's "financial and monetary discipline has effectively tamed inflation."

When the new administration took office in the summer of last year "the country's economic condition was alarming… and recession further aggravated the situation. But the government came up with a plan of action to address both recession and inflation at the same time," Tayebnia said Monday about the government's interim plan that would seek to exit recession.

"Addressing inflation, which is an easier task compared to recession, includes a series of proactive measures that outline what not to do in the economic sense. It's a tough task, especially considering the fact that our oil revenues have declined significantly," the minister added. 

Tayebnia asserted that the government's insistence on financial and monetary discipline has resulted in such achievements. 

"The government tried to curb inflation for two reasons; First, inflation essentially is an economic crisis which leads to poverty and deprivation; Secondly, stability and peace are what any economy requires on its way to fighting recession and ushering in prosperity."