Spending Driving Growth

April 2007 | Economic Analysis

Boosted by government spending real growth should reach 5.3% this year, though will continue to decelerate over the forecast period as macro mismanagement and political uncertainty take their toll on the economy. According to our calculations real expansion reached 5.7% in 2006/07 (1385), thanks to robust consumption growth and slowing but still high gross fixed capital formation. The local Iranian Fars news agency reports that the Central Bank of Iran and Economy Ministry have estimated 2006 growth at 5.8%, with the oil sector leading the way with 9%, agricultural sector 7%, services 6.3% and the mines and industries sector with

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