The Iranian economy will surge by 6% when sanctions are lifted, the Institute of International Finance (IIF) has estimated. The growth means the country will outperform many other states in the region.
At the moment, the Iranian economy is weighed down by severe sanctions because of the country’s nuclear programme, with the GDP growing by around 1.4% annually. The strong consumer market is set to attract many companies, banks and investors to Iran.
It is expected “implementation day”, on which the United Nations sanctions preventing Iran from foreign trade will be lifted, will take place in early 2016. Although it will take months or maybe years until the channels of investment and capital are open, the final opening of Iran will be good news for both that country and other economies.
The growth, estimated by the IIF, means that Iran’s economy would grow faster than China. Although the official figures estimate a GDP rise of just under 7%, based on other data, experts are saying the Chinese economy is actually growing by some 4%-5%.
Sarosh Zaiwalla, the founder of an international sanctions law firm, said that the growth projections confirm the expectations that foreign investment to Iran will be very sizeable following implementation day.
“Iran is set to capitalise on its status as the second largest economy in the region, with a rebound of its global oil exports to its previous high pre-sanctions levels,” Zaiwalla said.
“Already, investors from all over the world are in talks with their Iranian counterparts to ensure they do not miss out on the huge potential the Iranian market has to offer. Iran’s Middle Eastern neighbours, too, should grab this opportunity with two hands, and be central to the post-sanctions discussions to fully benefit from Iran’s re-emergence on the international stage.”