Economy in Iran Could Expand by 2% Without Sanctions

The economy in Iran could see a bounce of over 2% in growth if the nuclear agreement is signed and sanctions are lifted, according to officials in the Central Bank of Iran.

The surge would not appear immediately following the signing of the agreement June 30, but an impact will be realized by the last three months of 2015 and the first three of 2016.

Iran has demanded an immediate lifting of its sanctions once the nuclear agreement is signed with the six world powers.

Even without the sanctions being lifted, the Iran Central Bank and the International Monetary Fund both expect growth in the economy of Iran this year. However, removing the sanctions will have a substantial effect, said a senior deputy government.

Under an assumption that the present conditions would continue and there is no change until March 2016 in sanctions, growth is expected to be 1%. The IMF announced that it would be 0.6%

A large group of economists has been brought in by the governor of the Central Bank, Valiollah Seif, who was appointed following the elections when President Hassa Rouhani took the president’s office during 2013.

Over the past two years, the Central Bank and administration of Rouhani have managed to turn the economy around during a recession, bring about a larger reduction in the inflation and stabilize the rial’s exchange rate.

The bank is expecting the immediate unfreezing of its assets that are being held abroad as soon as this pending deal is reached. The bank has not been able to resume any contacts with any foreign banks.

Inflation has dropped sharply from the 45.1% monthly rate in June of 2013 when Rouhani became president to today’s 15%. The aim of the bank is to lower the inflation to single figures by early 2017.

Iran hopes to get a surge in investment from foreign countries and already has had many feelers from investors in the anticipation the agreement being signed.

The bank is hoping its macroeconomic management record over the past two days will have inspired confidence.

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