Year in review - Bearing changes
While having cemented itself as a prime investment destination on the apex of major trade routes, the Iranian economy is in a transition period that is expected to lead to renewed growth rates and long-term self-sufficiency under the fifth Five-Year Development Plan (FYDP), a part of Vision 2025.
After GDP growth of 7.3% in 2010, a slowdown into 2011 to 5% is mainly attributable to hydrocarbon export routes shifting away from Europe. While a high price of oil per barrel has kept things ticking along in Iran, it is solidifying trade ties with partners in South America and Asia, especially China, which will lead to future export growth. The gradual removal of energy subsidies is also the cause of temporary inflation pressure, while short-term uncertainty has been caused by speculative activity on the rial. Currently officiating trades at a flat rate of IR12,260 to the US dollar, the Central Bank of
Iran (CBI) hopes to maintain stability in a country that has become a center of attraction for FDI in the region due to its large, young demographics and highly skilled workforce.