Iran leans on oil for economic recovery

Oil production increasing along with non-oil growth.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Aug. 18, 2014 at 8:43 AM
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TEHRAN, Aug. 18 (UPI) -- An economic adviser to Iranian President Hassan Rouhani said developing the oil and gas industries could pull the nation's economy back from the brink.

An April report from the International Monetary Fund said inflation and unemployment are both high in the Iranian economy and the outlook was "highly uncertain." Constraints on oil revenues as a result of Western economic pressure means the Iranian economy is expected to continue contracting at least through the rest of this year, the bank said.

Masoud Nili, the economic advisor to the president, said the economy could recover with the help of oil and gas sector development. A package developed for Tehran puts much of the focus on oil.

"The package is expected to remove hurdles and challenges in the production sector and spur production," he said Sunday.

The government said oil production increased 11 percent in the four months since the March 21 start of the Iranian calendar year. This in turn helped to contribute to export earnings of around $7.9 billion.

The IMF in its report said economic growth outside of Iran's oil sector was "well below potential." The Iranian government's trade promotion division said non-oil exports increased 21 percent year-on-year.

Iran under the terms of a November 2013 agreement secured relief from some of the sanctions targeting its energy sector in exchange for a pledge to cut back on its nuclear research activity. The U.S. Treasury Department in July extended that relief through November.

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