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IMF Sees Steady Growth For Iran But Economic Reforms Needed

The International Monterrey Fund is predicting a steady growth in Iran's economy but cautions it still faces a number of challenges, including the need to reduce government debt and red tape.

The IMF says growth is expected to top 4 percent in the coming fiscal year while other Mideast oil exporters are facing close to zero percent growth. Iran's economy has seen a boost since international sanctions were lifted after the 2015 nuclear deal.

Although 4 percent growth is higher than what Iran experienced at the height of international sanction, but economists believe the country needs consecutive years of 8 percent growth to address its high unemployment.

IMF's report on Monday urged Iran to remove obstacles to private sector development and reduce social barriers and equalize pay for Iran's educated women.

Iran heavily subsidizes public sector companies, religious activities and its primary military force, the IRGC is heavily involved in the economy, stifling the private sector.

The IMF says banks also need "urgent restructuring and recapitalization" and is recommending that Iran allocate a share of its oil revenue to cover the costs of banking reforms.

Many Iranian banks face financial problems and some credit associations or quasi-banks have gone insolvent, costing tens of millions of dollars to depositors, who have staged protests in recent months.

Reporting based on AP