Amir Reza Souri

Abstract

Economic experts envisage clear and growing prospects for Iranian economy in 2017.
According to their estimates, the economic growth, growth of gross fixed capital formation and growth of value added in industrial and mining sectors are expected to be 5, 7 and 5 per cent respectively. They, however, argue that high unemployment rate; uncertainties about the future of the JCPOA; volatility of the foreign exchange market; government debt to banks, contractors and funds; military and security challenges in the region, as well as administrative and economic corruption are the most important economic challenges in 2017. Besides, the increased oil revenues, economic growth, foreign and domestic investment, mobility in public development spending, payment of contractors' claims, and the rise of housing transactions and positive growth in housing investment will be the most significant developments in 2017.

Other results of surveying the investment climate for 120 industrial, mineral and commercial enterprises show that the lack of proper guidelines for government investment, lack of investors’ rights protection, undesirable political conditions and smuggling have been the most important factors affecting the investment climate in recent years. In addition, the lack of unified foreign exchange rates, weakness of the capital market in financing, liquidity shortages, the failure to timely collect claims, and high rate of bank loan interest are considered to be the major challenges of the macroeconomic environment affecting the investment climate for the businesses in 2017. Political and economic stability is the most important expectation of businesses from the Government in 2017, which indicates the high sensitivity of industry, mining and trade activists to macroeconomic developments and policies. In other words, creating stable conditions in the macroeconomic environment through the stabilization of foreign exchange market and adoption of appropriate monetary, fiscal and exchange policies to support production is considered as a prerequisite for creating mobility and growth in economic subsectors.

Key words: Economic Outlook; Iranian Economy; Macroeconomic Indicators; Investment Climate; Industrial enterprises.