AFP, Washington :
The International Monetary Fund said Wednesday that Iran’s economy faces deep structural weaknesses as intensified nuclear sanctions have added to other domestic challenges to the government.
But it also said that prospects for the country to return to growth over the coming year have improved with the interim agreement in nuclear talks with global powers-though those prospects “remain highly uncertain”.
In its first review of the Iranian economy in nearly three years, the IMF said that Tehran needs to respond with a “prompt and vigorous” reform program to prevent further deterioration.
A combination of shocks, including the start of subsidy reforms, poorly funded social programs, and the intensification of trade and financial sanctions, had weakened the economy, the IMF said.
“Inflation and unemployment are high, while the corporate and banking sectors show signs of weakness.”
The Fund said the economy continues to shrink, forecasting a contraction of 1-2 percent in fiscal 2013-2014, which ends March 20. The pace of contraction is slowing, though, and inflation has eased from 45 percent in July to less than 30 percent in December.
