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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.

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