Iran needs deep economic reforms - World Bank

Business Materials 7 January 2021 05:01 (UTC +04:00)

BAKU, Azerbaijan, Jan. 7


A World Bank Group predicted that lifting of US sanctions would have a large positive impact on Iran`s economic indicators, as it did following the Joint Comprehensive Plan of Action (JCPOA) in 2015.

The Iran Economic Monitor (IEM) provides an update on key economic developments and policies. It examines these economic developments and policies in a longer-term and global context and assesses their implications for the outlook for the country, Trend reports citing World Bank Official Website.

According to the report, with the economy operating at a lower base and below potential output, recovery in the outer years could be stronger.

"The scope of challenges facing Iran’s economy raises the urgency of implementing deeper economic reforms complemented with more targeted social protection mitigation strategies," IME said.

Referring to the multiple years of recession, IME said the welfare of the Iranians has been severely undermined and put unprecedented strain on the most vulnerable which raises the urgency of reforms.

"Mitigation measures have partly offset these pressures in the past but remain insufficient due to lack of accurate targeting mechanisms and fiscal constraints," the World Bank said.

According to the World Bank special Group, a newly piloted Welfare Information Platform of Iranians could be a crucial tool in the implementation of future interventions and social protection strategies.

"Cash transfers alone would be insufficient to protect the most vulnerable if high inflation continues to reduce the real value of distributed cash transfers," IME said. "The sustainability of such measures and overall economic recovery will ultimately depend on a package of deeper economic reforms that address the economy’s structural challenges."