Iran's economy bustling, IMF says

Higher oil production and the lifting of sanctions equates to economic growth for Islamic republic.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   April 18, 2016 at 7:59 AM
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WASHINGTON, April 18 (UPI) -- The Iranian economy is outperforming the region as a whole mainly because of higher oil production and the lifting of sanctions, the IMF said.

In transcripts published Sunday, Masood Ahmed, the director of Middle East and Central Asia programs at the International Monetary Fund, said the Iranian economy is expected to grow by about 4 percent this year. That expansion should help lift the net growth for oil exporting nations by about 2 to 3 percent, he said from Washington.

"This is mainly due to the increased growth in Iran, because of the effect of lifting sanctions and the higher oil production that comes from it," he said in his remarks. "In Iran this year, we are expecting an extra 600,000 barrels or so per year of oil production."

Sanctions pressures eased in early 2016 following a nuclear deal signed in July between Iran, the five permanent members of the U.N. Security Council, plus Germany. Full trade in Iranian crude oil remains restricted because some financial maneuvers are still blocked by U.S. sanctions.

A tanker of crude oil, the first to leave Iran since mid-2012, left for the European market last month.

Though sanctions relief means more Iranian oil on the market, the Iranian government has tried to make its economy less dependent on oil for revenue. Ali Larijani, the speaker of the Iranian parliament, said the economy exports around $50 billion worth of non-petroleum products, "which is not sufficient."

Iran is outperforming its peer economies. The IMF said members of the Gulf Cooperation Council, a group that includes members of the Organization of Petroleum Exporting Countries like Saudi Arabia and Kuwait, should see economic growth slow from 3.75 percent last year.

"Economic growth in the GCC countries this year is expected to be below 2 percent in part as these countries are tightening their public spending in response to the oil price drop," Ahmed said.

Iranian representatives were not on hand for a weekend meeting in Doha to consider oil production levels. Saudi Arabia said no deal to keep output steady was possible without Iran's participation.

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