Iran Expecting 2016 Economic Growth to Exceed Five Percent in Wake of Sanctions Ease

Energy minister says country is implementing plan to reach eight percent growth, a figure required to deal with inflation, unemployment, says president.

Iranian women sit and have a snack at Hafez square in central Tehran on February 29, 2016.
AFP

REUTERS - Iran expects economic growth of more than 5 percent in 2016, its central bank's governor said on Saturday, after emerging from years of isolation and crippling international sanctions over the country's nuclear program. 

The major oil producer's economy is still struggling and growth is close to zero but many investors are betting that restoring Iran's links with the world and attracting foreign capital and technology will trigger a long-term economic boom. 

"Iran's economic growth slowed down in 2015 but domestic and international predictions both indicate that growth in 2016 would be beyond 5 percent," central bank chief Valiollah Seif said. 

In January world powers led by the United States and the European Union lifted sanctions on the country in return for curbs on its nuclear program. The subsequent leap in Tehran's stock market in late January and early February gave a hint of the country's investment potential. 

But President Hassan Rohani said last month that his country needed 8 percent economic growth in order to deal with inflation and unemployment, both of which stand above 10 percent.

Energy Minister Hamid Chitchian said on Thursday Iran is implementing a development plan aiming for yearly growth of 8 percent although many private economists consider that over-optimistic.