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IMF Says Iran Has Success With Inflation, Subsidies Reform

Inflation rose to over 25 percent in 2009
The International Monetary Fund (IMF) has praised the Iranian government's monetary policies, saying they have helped cut inflation to 12.4 percent for 2010-11 -- down from 25.4 percent two years earlier.

The IMF released a statement on Iran after its officials held consultations in Tehran from May 28 to June 9.

The statement said strong growth in Iran's non-oil sectors and a good performance in agriculture helped the country recover to 3.5 percent growth in 2009-10, despite a fall in world oil prices.

It said Iran has achieved "early success" in the implementation of what it described as an "ambitious subsidy reform program" that has involved increases in prices of energy, public transport, wheat and bread. It said the reform has removed almost $60 billion of subsidies.

The statement says the subsidy cuts would temporarily raise the inflation rate, but would also improve Iran's medium-term growth outlook by boosting efficiency in energy use, increasing export revenues, and strengthening overall economic competitiveness.

compiled from agency reports

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