Iran will need wholesale economic reform
Baku, Azerbaijan, March 2
By Aygun Badalova - Trend:
Iran will need wholesale economic reform in order to maintain positive growth in the country's economy projected in a short-term period, Jason Tuvey, Middle East Economist at British economic research and consulting company Capital Economics believes.
In the report, obtained by Trend, Tuvey said that recent elections in Iran have provided a positive endorsement of President Rouhani's reformist policies ahead of next year's presidential vote.
Economist believes that the country could enjoy a short period in which economic growth reaches over five percent a year.
"But sustaining this for any length of time will require wholesale economic reform and, with hardliners not completely out of the picture, the government has a tough job on its hands," he said.
Iranians voted on Friday in elections for the 290-seat parliament and the 88-seat Assembly of Experts, a powerful clerical body that appoints the country's supreme leader.
According to the results announced by Iran's Elections Headquarters Feb. 29, the candidates supported by moderates and reformists have won the majority of seats in Tehran.
"The outcome is likely to be seen as a clear endorsement of the policies of President Rouhani and puts him in a strong position ahead of presidential elections in 2017," Tuvey said.
While Iranian elections are a positive step, there are reasons to be cautious on both the economic and political fronts, economist believes.
"Starting with the economy, many commentators have overlooked the fact that sanctions were far from the only problem affecting Iran's performance," Tuvey said.
While oil output may be raised, the collapse in oil prices means that export revenues will not return to their previous levels, according to the economist.
"Moreover, wide-ranging economic reforms will be needed if Iran is to sustain rapid growth," he said.
"According to the World Bank, the business environment is considered to be among the worst in the world. The election results provide some grounds for optimism," Tuvey added.