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The Iranian economy could expand up to 4.4% in 2021 if US President-elect Joe Biden lifted the sanctions that contributed to a deep three-year recession, the trade body Institute of International Finance said on November 26. (IIF), according to Reuters.
The coronavirus (COVID-19) crisis could, however, limit foreign investment even if it is approved by Washington, he added.
Biden said he will explore the US return to the nuclear deal Iran concluded in 2015 with six world powers. Under that agreement, sanctions were lifted in exchange for holding back Iran’s nuclear development program. However, US President Donald Trump withdrew the US from the deal in May 2018 and returned to sanctions.
The Iranian rial currency has lost another 50% of its value against the US dollar in 2020 to date, reflecting the economic damage caused by sanctions and the coronavirus pandemic, a third wave that has taken hold in the Islamic Republic.
The IIF said that if the United States lifted most of its economic sanctions on Iran by the end of 2021, the Iranian economy could expand by 4.4% next year after an expected 6.1% contraction in the year. 2020.
It would therefore grow by 6.9% in 2022 and by 6% in 2023, the IIF added. He also noted that if oil exports increase, Iran could see its foreign reserves rise to $ 109.4 billion by the end of 2023. If Biden drops Trump’s policy of using sanctions to block oil exports. Iranian, Iran could export about two million barrels of crude oil. per day within a couple of years, according to some estimates.
Garbis Iradian, IIF chief economist for the MENA region, told Reuters that FDI inflows into Iran will progressively increase from $ 890 million this year to more than $ 6.4 billion in 2025.
Assuming most sanctions can be lifted by the end of next year, FDI is likely to remain below $ 2 billion in 2021, with most of the money coming from China, Iradian said, adding: In addition, the coronavirus pandemic will limit FDI inflows in 2021.
The Iranian economy would remain fragile, albeit “not on the verge of collapse” if most of the sanctions remained in place, the IIF said.
In such a “pessimistic” scenario, Iran would record 1.8% growth next year, while its foreign reserves would gradually decline from around $ 80 billion this year to $ 46.9 billion by the end of 2023 .
About 90% of Iran’s official reserves are frozen overseas due to US sanctions.
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