Iran’s non-oil sector expected to grow more – IMF
Baku, Azerbaijan, May 2
By Emil Ilgar – Trend:
Iran is expected to see its non-oil growth accelerate from 0.75 percent in 2016 to almost 3.5 percent in 2017, the International Monetary Fund reported May.2.
“The non-oil growth in the countries of the Gulf Cooperation Council (GCC) is projected to strengthen from almost 2 percent in 2016 to 3 percent in 2017,” IMF reported on its outlook for the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) report.
The report says growth in MENAP oil-exporting countries is expected to slow down in 2017 because of the oil production cuts agreed to under the terms of the recent OPEC+ deal.
“In contrast, although the outlook varies across individual countries, overall growth in the non-oil sector is expected to accelerate in 2017 as the pace of fiscal consolidation eases”.
The report says that over the medium term, although overall growth in the Gulf Cooperation Council members (GCC) and Algeria will be supported by a projected recovery in oil production, non-oil growth will remain constrained by continued fiscal tightening in countries with significant adjustment needs (Algeria, Bahrain, Oman, Saudi Arabia).
“In Iran, the outlook in continues to be hampered by remaining sanctions and but limited fiscal space for oil-related investments implies little potential for further growth in oil output in the near term”.
The report says Iran is revamping its public financial management system, including introducing accrual accounting, modernizing the Financial Management Information System, and developing a Treasury single account. The Iranian banking sector needs recapitalization,” IMF said.