IMF hails Iran’s upbeat economy

The International Monetary Fund (IMF) has praised Iran over its accelerated economic growth and successful economic policies and foresees a bright outlook for further Iranian gains.

The IMF said in its latest report that Iran’s economy grew by 3.2 % in 2011, which is by far higher than earlier reports on the country’s economic performance, the Wall Street Journal reported on August 4.

The organization also hailed the Iranian government’s economic reforms which include distribution of monthly cash reimbursements, targeted at the poorest Iranians, to replace subsidies.

The measures will remove as much as $60 billion in subsidies, or 15 percent of Iran’s gross domestic product, the IMF said, adding that they will “increase the efficiency and competitiveness of the economy, improve income distribution, reduce poverty and help Iran unlock its full growth potential.”

The subsidy reform plan charts out how the Iranian government will gradually slash national energy subsidies over the course of five years, with low-income families being compensated directly with cash subsidies.

In a July report, the IMF noted that Iran’s subsidy reform plan has reduced inequalities and improved living standards in the country.

The initial stage of the plan was implemented in October 2010 as the administration deposited subsidies into the bank accounts of heads of Iranian households.

Iran’s President Mahmoud Ahmadinejad terms the arrangement Iran’s “biggest economic plan in the past 50 years.”

President Ahmadinejad said the costly national subsidy system in the past created huge socioeconomic gaps and led to “economic injustice.”