CBI: Growth Rate Likely to Beat Expectations

The Central Bank of Iran has responded to media reports that viewed the latest World Economic Outlook by the International Monetary Fund in a negative light.

These reports cited IMF projections that Iran’s GDP growth for 2017 and 2018 will be 3.3% and 4.3% and the inflation rate will go up to double digits once again to reach 11.2% and 11% respectively. These figures were construed as a warning for the Iranian economy and a regression for the administration of President Hassan Rouhani.

In a statement posted on its official news website, CBI notes that the international entity has made its projections based on data collected up to December 14, 2016, which mostly consist of changes that took place during the first half of the previous fiscal year (ended March 20, 2017).

CBI adds that “predictions in the report have been made without considering the policy changes incorporated since that time”.

According to the central bank, the IMF report has not considered many developments, including a change in the country’s base year for calculating growth and changes in macroeconomic indices.

CBI refers to developments in the oil and gas sectors as a prime example. IMF registered a 6.6% GDP growth for 2016 -17 by considering a decline in crude oil exports, “while considering the developments of the first nine months of the previous year, growth is expected to be in double digits, which is twice the figure projected by IMF”.

In conclusion, the CBI statement predicts that in light of the collective monetary, fiscal, trade and foreign exchange policies, strengthening of local supply and an improvement in liquidity management, “ a good level of economic growth would result in tandem with the single-digit inflation” during the current fiscal year that began on March 21.