Washington, D.C., April 15, 2015 - The economic implications of lifting sanctions on Iran as a result of a final agreement between Iran and the P5+1 countries would be enormous but would take about a year to be felt in full, according to a new research note by the Institute of International Finance.
"The economic implications for Iran of reintegration into the global economy would be enormous," said Garbis Iradian, chief economist for the Middle East and North Africa at the IIF. "It would spur a sharp economic recovery with a rise in oil exports, regained access to frozen foreign assets, and sizeable foreign capital inflows."
Assuming a final comprehensive agreement is signed by June 2015 and the deal is implemented, IIF projections show an acceleration in Iran's economic growth from 3 percent in fiscal year 2015/16 to 6 percent in 2016/17 driven by exports and private investment, narrowing of the fiscal deficit, elimination of the large spread between the official and the black market exchange rate by mid-2016, and some improvement in the business environment to attract foreign direct investment. ' '
The IIF also noted that the agreement could restore Iran's oil production and exports before mid-2017, adding to pressure for continued low oil prices beyond 2015.
The Institute of International Finance is the global association of the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. For more information visit www.iif.com.