Islamic Republic of Iran : 2009 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Iran

Abstract

The Islamic Republic of Iran’s 2009 Article IV Consultation highlights that real GDP growth has slowed following the decline in oil prices, the non-oil fiscal position has become tighter, and banks’ financial situation has weakened. The recent approval of an ambitious energy price reform by Parliament could bring significant medium- and long-term benefits by increasing economic efficiency, and would help improve the macroeconomic outlook. A reduction of energy subsidies and a significant increase of non-oil revenue are needed to improve economic efficiency and achieve a more sustainable medium-term fiscal position.