TEHRAN – President Hassan Rouhani highlighted gains in Iran’s economy on Wednesday, pointing out in particular how his administration has been shoring up economic growth without too much help from oil revenues.

Rouhani made the remarks on the sidelines of the last cabinet session before the Iranian New Year, March 21, and just a little over two months before the May presidential elections. 

“Now we are less reliant on oil and more on taxation, exports surpass imports, and good steps have been made toward growth,” the moderate president told a clutch of reporters surrounding him.

Self-sufficiency in the production of wheat, increasing oil and gas outputs, growing gas condensates exports, and retrofitting of road, rail, and air transport systems were among economic gains he bragged about the most.

In its latest report, the International Monetary Fund has forecasted that Iran’s real GDP growth will rebound to 6.6 percent in 2016/17.

“Maintaining the growth rate that was launched in the (current) year is the main economic issue for the country and all economic policies should be designed around this axis,” Rouhani told the parliament in a speech broadcasted live by state television in December.

The administration has particularly devoted substantial energy to curbing inflation, vital for the ailing economy which indicated signs of a rebound on the back of a 2015 international nuclear deal.

The country’s inflation declined to single digits and has hovered in the 9.5 percent range, year-on-year, since mid-2016.

It is expected to temporarily rise to 11.9 percent by end-2017/18 reflecting recent liquidity growth and pass-through from exchange rate depreciation, before returning to single digits on the back of prudent fiscal and monetary policies.

After struggling for years under sanctions, Iran's economy has picked up following the removal of most of the restrictions under the nuclear deal in January 2016.

Iran reached an agreement with five veto-holding powers of the UN Security Council, United States, Russia, China, United Kingdom and France plus Germany, to limit its nuclear program in return for lifting crippling international sanctions on the country’s economy.

The deal was supposed to release tens of billions of dollars belonging to Iran that had been frozen in foreign banks, and allow the oil-rich country to trade freely with customers around the world, including with the Chicago-based aircraft manufacturer Boeing and the French Airbus.

But Rouhani is under pressure to sustain economic growth as his critics say he has failed to improve living standards as much as hoped after the lifting of sanctions.

Banking ties with the international community still face bottlenecks and the prospect is far from certain.

Early March, Supreme Leader Ayatollah Seyyed Ali Khamenei chided the country's sluggish economic recovery despite the lifting of sanctions, calling upon the government to champion greater self-sufficiency.

"Of course the government has taken remarkable steps but if the resistance economy had been implemented fully and widely, we could witness a tangible difference in people's lives,” he was quoted as having said.

The "resistance economy" promoted by the Leader is aimed at making Iran's economy more self-sufficient. The term was used for the first time in 2013 by the Leader to highlight the importance of domestic production as a tool to reduce dependence on foreign resources.

AK/SP