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Nuclear deal paves way for Iran's economic recovery

By Muntather Watan

TEHRAN, July 13 (KUNA) -- A year after Iran reached a nuclear deal with the Group of Five (G5) states on its nuclear file, Iranian citizens still await major and tangible results of the much-trumpeted accord on the domestic economy and their livelihood.
Many Iranians are optimistic the agreement would result in gradual recovery of the national economy, in shadow of rapprochement between Tehran and major powers and release of its frozen assets, estimated at USD three billion.
However, some Iranians believe that the nuclear deal "would not lead to a miracle in the Iranian economy," which has structural problems, particularly in the banking sector.
Others say that it "casts away the ghost of war and paves the way for commercial and economic partnerships with most of the European and western states, thus boosting its regional and international status." Iranian Government is seeking to employ the deal and the openness with the west to lure investment capitals in the oil, gas and infrastructural sectors.
Saeed Laylaz, an economic expert, told KUNA that he believes that not only the deal with the west has led to major positive economic measures, hailing the government of Hassan Rouhani for stemming inflation and adopting a sound management policy for the economy. The oil proceeds have increased due to doubling oil exports, reaching 2.5 million barrels a day.
Iran, he says, has restored its status in the oil market. "Despite drop of the oil prices we have managed to maintain economic growth, forecast this year at four percent and may be five percent," said Laylaz to Kuwait News Agency.
The government has succeeded in achieving economic stability; which is a lucrative factor for local and external investments.
"Impact of the nuclear deal is clear on the Iranian masses and livelihood, through the higher purchase power and soaring internal tourism, in addition to the falling prices of food products," he said.
Laylaz also indicated at rise of autos' production from 700,000 cars in 2013 to more than one million; such is yet another indication of citizens' higher purchase power.
When told that many Iranians have not sensed economic improvement following the nuclear deal, Laylaz argued that the huge inflation witnessed in recent years has affected the purchase capacity; thus some citizens continue to compare the current conditions to the pre-2010 situation.
Iran is not experiencing a recession but is passing through "a calm and stagnant situation" which some allude to as recession. This is true concerning some sectors such as the real-estate.
He re-pointed out that the nuclear deal alone will not solve the economic problems, which warrant sound management and reforms and boosting local products, "and this is what the government is working on." Laylaz added that recently-crafted external business deals would have long term, rather than short term results.
Abbas Araghchi, a member of the team that negotiated the nuclear accord with the western powers, argued that the deal affirmed Tehran's right to retain the nuclear energy and removed snags in face of the economic growth." However, there are still other obstacles such as international and American sanctions as well money laundering issues which warrant a long time to be thrashed out." Mohammad Reza Nematzadeh, the Minister of Industry, Mining and Commerce, affirmed that Iran had worked out up to 100 contracts with foreign states after implementing the deal.
As to problems obstructing financial remittances and external banking transactions, he said this problem is being tackled gradually and the central bank has drawn up 35 deals with international banks. Moreover, Iranian banks have inked up to 215 agreements with foreign banks.
Iran, along with the G-5 states and Germany worked out the deal last year following a 12-year crisis. Essentially, it calls for lifting economic and financial curbs on the nation in exchange for imposing restrictions on the nuclear program, basically to ensure that Tehran would not develop nuclear military capabilities. (end) mw.rk