TEHRAN – The Iranian economy will grow 2.8 percent in 2014, Business Monitor said in its latest report. Meanwhile, the country’s inflation rate is estimated at 23 percent in 2014, according to the report. The Iranian economy will grow by 3.3 percent on average by 2018, the report added. Business Monitor had predicted an inflation rate of 35.6 percent for Iran in 2013. In its April report, Business Monitor said the Iranian economy will return to growth in 2014, as the improvement in relations with the West and better macroeconomic management will lead to an improved outlook for exports and increased business and consumer confidence.
Recent improvements in relations with the West bode well for the country’s economy, according to the report. The economy is forecast to expand by 2.9 percent in 2015. However, the Iranian rial will remain sensitive to developments in nuclear negotiations over the coming quarters.
On April 3, the International Monetary Fund said Iran had achieved considerable progress in raising per capita income and living standards in previous decades. According to the report, since the presidential election in June 2013, there have been some signs of stability. The exchange rate has appreciated markedly in the bureau/parallel market. The Central Bank of Iran has kept a lid on base money growth thanks to tighter credit to the banking system and some fiscal consolidation, and 12-month inflation declined to about 29 percent in January 2014. With some positive tailwinds from the external side and some incipient signs that the pace of contraction in domestic demand is slowing, it is projected that economic activity will begin to stabilize in 2014/15, with real GDP projected to increase by 1–2 percent.