An Analysis of Iran’s Economic Growth Challenges: Macroeconometric Modelling Approach

This paper examines the economic growth challenges of Iran`s economy for the period 2017-2021, based on estimating and analyzing a acroeconometric model. The results of the baseline scenario show that even with no economic sanctions, and assuming gradual increase in production and oil export the economic growth would be about 3 percent per year on average during the above mentioned period. Thus, for the purpose of economic stability and productivity improvement, a set of reform policies should be adopted. According to the findings of different policy simulation of the model, the low annual economic growth in the baseline scenario could be improved to 5 percent through various policy reforms such as conducting specific rules for fiscal, monetary, exchange rate and energy pricing policies, with emphasis on the national development fund`s role in stabilizing government budget. However, to achieve sustainable development with high economic growth and low unemployment, it is necessary to implement outward-oriented policies toward more openness and domestic private investments.