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IMF: Iran at 'pivotal moment' to rejoin global economy

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The International Monetary Fund's number two official on Tuesday told Iran that it faces a crucial opportunity to rebuild its economy and rejoin the global economy.

[WASHINGTON] The International Monetary Fund's number two official on Tuesday told Iran that it faces a crucial opportunity to rebuild its economy and rejoin the global economy.

However, with sanctions over its nuclear program lifted but tough US restrictions still in place on banking, IMF deputy managing director David Lipton said Tehran needs to take key steps, including taking action to stop money laundering and terror financing.

In a speech delivered Tuesday at the Central Bank of Iran, Mr Lipton praised reforms taken in recent years that had slashed inflation and put the country on a growth path even before the January lifting of tough nuclear sanctions, which had sharply curtailed the country's oil exports.

"I speak here today at a pivotal moment for Iran's economy," said Mr Lipton, according to the text of his speech.

"With important sanctions lifted, your country has a new opportunity to deepen its integration into the global economy. That process has the potential over time to support faster growth and rising living standards for Iranians."

Mr Lipton said Iran faces a number of broad challenges, including the slower global economy and investor wariness of risks in emerging countries; low oil prices; a weak banking system; and the need for budget reform.

He pointed to how China and countries in Latin America and Eastern Europe joined the global economy after long isolation to much success by undertaking significant reforms.

But he also acknowledged that Iran faces a unique hurdle: that continued US sanctions due to alleged past support for terrorism and human rights violations still keep the country locked out of a large part of the global financial system, and frighten off major Western companies from investing.

More progress on this, he hinted, could open the door wider to the world economy.

"The Iranian authorities have made recent progress in establishing a framework aimed at combating money laundering and the financing of terrorism," he said.

"This is a critical element for reconnecting with the international financial system. The IMF will continue to support the Iranian authorities' efforts in this area."

AFP