Friday, January 16, 2015

As negotiations between Iran and the P5+1 resumed recently, the stakes for Iran’s economic future are high. Sanctions have inflicted heavy damage on Iran’s economy. In addition to the impact of the sanctions, Iran’s economy is suffering from the recent sharp fall in oil prices. Assuming no agreement, the Iranian economy would contract in the next two fiscal years and the fiscal deficit would widen to 5% of GDP. The harsh economic and social consequences of a failure to reach an agreement combined with the slump in oil prices would deepen Iran’s economic woes and could even threaten the current political order. 

IIF Authors

Garbis Iradian

Head of MENA Research

George T. Abed

George T.
Distinguished Scholar in Residence