Irans growth has been fragile and restrained over the last decade given a combination of structural weaknesses, external shocks including limitations imposed by economic sanctions and weak macroeconomic management. The GDP growth rate has been erratic over the last many years with 2013/14 witnessing a decline 0f 1-2% while inflation has been as high as 30% in December 2013 indicating stagflationary pressures. But with the recent interim P5+1 agreement on implementing the Iran Nuclear programme having been signed and the consequential improvement of the external environment the prospect for growth is cautiously positive.
Subject to no set backs to the nuclear negotiation process in the short run and an eventual easing of sanctions in the long run along with a continuation and acceleration of the economic reform process that the government has already begun particularly in the areas of monetary, fiscal and labour reforms, Irans economy is expected to grow at a much faster and sustained pace over the next few years. The IMF forecast for 2014/15 is a growth of real GDP by 1-2% and a decline of inflation to 15-20%.
Given its abundant <strong>natural gas and oil reserves</strong> the economy is heavily dependent on this sector and has developed most industries around it. Though a mature industry it still has significant growth prospects with any ease in sanctions. With its history of sanctions most of the sector development has been primed towards meeting domestic needs agriculture, mining, handicrafts and auto-manufacturing. But with the changing external environment, sectors that might have growth prospects in the medium term are Steel Production, Construction, Retail and Tourism.