Iran fiscally ready for economic comeback, says Moody’s

Iran is fiscally and structurally ready to reemerge as a regional economic power as the lifting of economic sanctions will give the country access to over $150 billion in frozen assets, Moody’s Investors Service said in a report today.

“We project the resulting implementation of investment plans, as well as a recovery in oil production, to contribute to higher GDP growth of 5 percent in 2016-17,” said Atsi Sheth, an associate managing director at Moody’s.

Iran’s $417 billion economy is the second-largest in the Middle East after Saudi Arabia, and is expected to enjoy a boost following an inflow of investment in the country’s aging oil infrastructure. Iran’s finance minister said his country would need $90 billion annually in external funding to meet its target of eight percent economic growth.

International sanctions have made the country more diversified than other regional oil producers, as structural reforms have already been implemented to combat lower oil revenues. Many oil exporters in the region are “just beginning to consider structural fiscal reform,” said Sheth.

The main credit driver for unrated Iran remains its ability to meet the requirements of its nuclear deal and approval that requirements have been met, Moody’s added.