Iran's economy will suffer until sanctions lifted: IMF

Iran's economy will continue to suffer until international sanctions are lifted and the country is able to significantly lift oil exports, the International Monetary Fund said Monday.

"The sharp decline in global oil prices, tight corporate and bank balance sheets, and postponed consumption and investment decisions ahead of the expected lifting of economic sanctions, have significantly slowed down economic activity since the fourth quarter of 2014/15," the IMF said in its annual review.

As a result, real economic growth is estimated at near zero (-0.5 to +0.5) for 2015-16. Inflation is expected to remain near 14 percent by year-end.

"Prospects for 2016/17 are brighter, owing to the prospective lifting of economic sanctions. Higher oil production, lower costs for trade and financial transactions, and restored access to foreign assets, are expected to lift real GDP to about 45.5 percent next year," the IMF said.

The IMF urged Iran to undertake prudent monetary and fiscal policy as a way to keep inflation under 10 percent.

The IMF also praised announcements by the Iranian government that it would unify the foreign exchange market and remove foreign exchange restrictions and multiple currency practices.