Planning and Budgeting

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This paper tries to express the investment behavior of Irans economic sectors during 1959-2001 by means of proposing an econometric model. The results of the model are offered in two options: present status continuation and desirable status. The first option reveals that the continuation of the present trends in Iran will lead to the economic growth of 3.9 percent and total investment growth of 3.9 percent. The growth rate would be 2.7 percent in agricultural sector, 1.5 percent in petroleum sector, 4.4 percent in industry sector and 4 percent in other economic sectors. On the other hand, the results of desirable status option indicate that on average 10.9 percent investments should be made annually to achieve a growth rate of 8.6 percent. In order to reach such a volume of investment, 7 percent of new investments should be undertaken in agricultural sector. Accordingly, the new investments in percent and 9.5 percent respectively. Evidently, materializing such desirable growths is impossible while retaining the existing structures. Hitting such a target needs meeting some requirements including mobilizing savings of private sector, institutionalizing private sector development, reforming and developing financial and banking institutions, preparing a politically favorable and stable investment environment, controlling the inflation and foreign exchange rate fluctuations, reforming the rules and regulations, annulling laws that lead to monopolies and so on.

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