The removal of US sanctions under former US President, Obama, caused Iran’s economy to expand 12.5% in 2016. Growth moderated to a more sustainable 3.5% in 2017 and is forecasted to push 4% p.a. over the coming years. The recovery in oil prices pose significant upside to the outlook. Though a possible return of US sanctions under President Trump remains a key risk.
Favourable demographics and abundant energy resources (Iran has the world’s second largest gas reserves and fourth largest oil reserves) bode well for the long term outlook. But without employment opportunities for the large population, Iran will not be able to lift its living standards.