MENA Quarterly Economic Brief, July 2015: Economic Implications of Lifting Sanctions on Iran

By Shantayanan Devarajan and Lili Mottaghi

The July 2015 nuclear deal between Iran and Permanent Members of the UN Security Council and Germany (P5+1), with the attendant lifting of sanctions on Iran, will have significant consequences for the global, regional and national economies. First, Iran's return to the oil market, coupled with increased production from Libya (should the conflict subside) will keep world oil prices low. 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, is likely to pick up. Thirdly, the Iranian economy, which has been in recession for the past two years, will receive a major boost from increased oil revenues--conservatively estimated at about $15 billion in the first year--and lower trade costs. This issue of the MENA Quarterly Economic Brief (QEB) traces these effects on the world oil market, on Iran's trading partners, and on the Iranian economy.

• Language: English
• Publisher: World Bank Publications
• Release date: Jul 13, 2015
• ISBN: 9781464807022

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