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| Source: OBG. |
According to the consultancy, the lifting of economic sanctions is likely to provide a near-term boost to the Islamic republic’s economy, particularly its banking system which should see a significant drop in international transaction costs. At the same time, while strong capital inflows, including foreign direct investment and the repatriation of previously frozen assets will also help drive growth.
Iran is home to the second-largest natural gas reserves worldwide and the fourth-largest reserves of crude oil. As such, growth moving forward will be dominated by hydrocarbons exports, with oil production witnessing a significant uptick following the lifting of economic sanctions, OBG says. However, despite oil prices having rallied in recent months, concerns over volatility remain, largely fuelled by global economic uncertainty and the impact of the Chinese slowdown on neighbouring Asian markets.