Iran’s economic growth would outperform most of the Middle East and North Africa (MENA) countries in 2016 when sanctions fall, according to a Washington-based global banks association, Institute of International Finance (IIF), on Sunday.
Due to the slump of oil prices, 15 MENA countries would post a combined growth of three percent in 2015, down from the average of 4.5 percent from 2005 to 2014, the IIF said.
Few countries would grow stronger in 2016, but Iran would stand out with an expected growth increase from 1.4 percent to nearly six percent next year, it said.
According to Dr. Garbis Iradian, chief IIF economist in Middle East and Africa, Iran has already benefited from a partial lifting of sanctions following the nuclear agreement.
“Iran emerged as the region’s second largest economy behind Saudi Arabia and ahead of the UAE,” explained Iradian, as “Iran has the most diversified economy in MENA, before the UAE.”
Over 700,000 barrels of Iranian oil will enter global energy markets by the end of 2015, said Dr. Giyas Gokkent, senior economist Middle East and Africa, IIF, in Dubai. That would become the flip side of the coin for the oil-producing Arab states.
The IIF said the lifting of economic sanctions on Iran, combined with the return of foreign expertise in the energy sector and spare parts, would allow for a rebound in oil exports to pre-sanctions levels within six months.
Therefore oil prices would remain low and probably fall further in 2016.
The price of the black gold fell from 110 U.S. dollars a barrel in July 2014 to below 45 dollars per barrel nowadays, amid the shale oil expansion in the United States and the expected re-entering of Iran.
The IIF, founded in 1983, is a global association of financial institutions with close to 500 members from 70 countries and regions.
Its members include most of the world’s largest commercial banks and investment banks, a growing number of insurance companies and investment management firms.