Vice-President Mohammad Bagher Nobakht says Iran expects its economic growth to accelerate next year as the removal of sanctions under a nuclear agreement offsets a global slump in oil prices.
Nobakht told Bloomberg that the growth is predicted to reach five percent by 2016, up from an expected 3 percent this year.
“Given oil revenue only represents 30 percent of the budget, the decrease in oil prices” has had little impact on government spending, including on key infrastructure projects, Nobakht said in Tehran. The removal of sanctions will also allow the government to receive its frozen assets and shore up its foreign-currency reserves, he said.
The MSCI Emerging Markets Index fell 5 percent to 771.62 at 12:03 p.m. in New York on Monday, the most since September 2011 and bringing its seven-day retreat to 11 percent. Brent oil futures touched $42.51 in Monday, the lowest since March 12, 2009.
Iran’s improving economic outlook has already seen tax revenue increase by about 30 percent since the start of the Iranian year on March 21, compared with the same period the previous year, said Nobakht.
Its foreign currency revenue totals $100 billion and the lifting of sanctions would release some $30 billion, he said.
“We don’t have much debt, and we have considerable foreign currency reserves. This creates more confidence for those who want to invest in Iran,” Nobakht said. “For the government, it’s not about bringing $40 or $50 billion into the country, these figures are not important.”
“What is important is the total assets that are seen as the Central Bank of Iran’s reserves in the world and which foreign investors can rely on when coming to invest,” he added.
More than $5 trillion has been erased from the value of stocks worldwide since China’s shock currency devaluation on Aug. 11. China’s woes could shape the decision-making of other central banks by weakening the global economic outlook and transmitting another bout of deflationary pressures around the globe.
“Our economy is not yet interlinked with the word economy so the fluctuations that happen in markets abroad don’t afffect Iran with the same intensity or as directly,” Nobakht said.