Skip to Main Navigation

Economic implications of lifting sanctions on Iran (English)

Iran and the Permanent Members of the UN Security Council and Germany (P5 1) reached a deal on July 14, 2015 that limits Iranian nuclear activity in return for lifting all international sanctions that were placed on Iran. This issue of the MENA Quarterly Economic Brief traces the economic effects of removing sanctions on Iran on the world oil market, on Iran’s trading partners, and on the Iranian economy. The most significant change will be Iran’s return to the oil market. Secondly, once sanctions and restrictions on financial transactions are relaxed, Iran’s trade, which had both declined in absolute terms and shifted away from Europe towards Asia and the Middle East, will expand. Thirdly, the Iranian economy, which was in recession for two years, will receive a major boost from increased oil revenues and lower trade costs. In addition, there are estimates that Iran holds about $107 billion worth of frozen assets overseas, of which an estimated $29 billion will be released immediately after sanctions removal. Finally, foreign direct investment, which had declined by billions of dollars following the tightening of sanctions in 2012, is expected to pick up. With the lifting of sanctions, the government of Iran has the opportunity to put in place a policy framework that will enable the economy to make maximum use of this windfall and put the economy on a path of sustained economic growth.

Details

  • Author

    Devarajan,Shantayanan, Mottaghi,Lili

  • Document Date

    2015/07/23

  • Document Type

    Brief

  • Report Number

    98389

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Middle East and North Africa,

  • Region

    Middle East and North Africa,

  • Disclosure Date

    2015/08/10

  • Disclosure Status

    Disclosed

  • Doc Name

    Economic implications of lifting sanctions on Iran

  • Keywords

    number of road accident deaths;Oil and Gas Sector;oil and gas export;real exchange rate appreciation;direction of trade statistic;international sanction;Oil Export;oil and gas industry;female labor force participation;balance of payment crisis;oil price;barrels per day;Oil & Gas;unemployment rate;demand for labor;income elasticity;oil production;bilateral trade;world oil market;world oil price;multiple exchange rate;oil export earnings;list of countries;cost of import;labor market trend;oil revenue;barriers to trade;restrictions on imports;production and export;natural resource rent;oil production capacity;educated labor force;world health organization;crude oil production;Social Safety Nets;agriculture and industry;number of jobs;emerging market economy;quality of education;restrictions on trade;access to technology;computable general-equilibrium;assets of individuals;gdp growth rate;official unemployment rate;returns to capital;sectoral growth rate;expansion of trade;foreign direct investment;demand for capital;privileges and immunity;crude oil export;Computable General Equilibrium;international oil price;oil export revenue;cost of production;current account balance;short term impact;crude oil price;consumption of fuel;alternative to insurance;foreign currency loan;sovereign wealth fund;control of corruption;policy and institution;foreign exchange market;official exchange rate;price of capital;bilateral trade flow;oil sector;auto industry;asian countries;oil exporter;trading partner;Pharmaceutical Industry;estimation result;oil windfall;automobile production;tradable sector;oil industry;manufacturing sector;foreign revenue;uranium enrichment;independent variable;monetary policy;national income;national currency;frozen asset;Energy Sector;global economy;export growth;economic sector;economic sanction;framework agreement;global effects;world price;export loss;foreign multinational;cross-border trade;transport cost;investment need;auto production;human capital;trade model;Macroeconomic Policy;real gdp;poverty trend;labor-intensive sectors;oil field;oil importer;construction sector;Job Creation;cash subsidy;energy subsidies;banking system;road system;sovereign guarantee;investment boom;investment resource;advanced country;high-tech industry;efficiency gain;subsidy reduction;government use;global market;international media;gas import;oil transaction;gas field;construction permit;Exchange Rates;nuclear program;additional revenue;minimum level;external capital;transmission speed;domestic economy;telecoms service;international market;short-term debt;Public Services;savings account;harmful effect;road quality;technology industry;commercial building;government revenue;external shock;government fund;high commodity;capital account;comparative advantage;market control;expenditure decision;expenditure shock;car industry;private actor;high unemployment;extractive sector;greenfield investment;fiscal space;negative sign;projection period;industrial sector;car sale;estimated elasticity;Extractive Industry;international company;unskilled worker;wages rise;world market;income gap;job loss;lower inflation;black market;sea cargo;point estimate;Boosting Growth;Real estate;Capital Investments;humanitarian assistance;research assistance;commercial purpose;original work;copyright owner;oil producer;fiscal balance;increased export;import good;agricultural equipment;petrochemical industry;foreign policy;total trade;Financial Sector;humanitarian activity;stock market;informational material;quantitative magnitude;debt relief;debt crisis;macroeconomic indicator;annex annex;administrative support;trade elasticity;financial crisis;trading cost;creating job;educated woman;job match;merchandise trade;job opportunity;world exports;household income;oil account;macroeconomic impact;job opportunities;cargo inspection;trade costs;domestic investment;global supply;foreign debt;housing construction;foreign trade;international economics;market opportunity

Downloads

COMPLETE REPORT

Official version of document (may contain signatures, etc)

  • Official PDF
  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.

Citation

Devarajan,Shantayanan Mottaghi,Lili

Economic implications of lifting sanctions on Iran (English). MENA quarterly economic brief,issue no. 5 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/575391468187800406/Economic-implications-of-lifting-sanctions-on-Iran