Iran started raising the prices of energy and bread sharply in December 2010, removing close to USD 60 billion dollars (about 15 percent of GDP) in annual product subsidies.
According to the parliamentary ratification brining energy prices to the market value is going to take place within five years.
The subsidy reform is expected to increase efficiency and competitiveness, improve income distribution, reduce poverty, and help Iran unlock its full growth potential.
Some international bodies such as IMF (International Monetary Fund ) have praised positive effects of the plan on Iran's economy.
In an article published on August 3 IMF welcomed the early success in the implementation of the subsidy reform, which is a critical step in enhancing energy efficiency, supporting growth, and moving further towards a market-based economy.
IMF noted that cash transfers, financed out of the revenues arising from the energy price increases, were instrumental in supporting domestic demand, improving income distribution, and reducing poverty.