The Iranian economy has greatly benefited from the lifting of the nuclear sanctions in 2016, when the Joint Comprehensive Plan of Action (JCPOA) nuclear deal was signed. Oil production and exports rebounded strongly, leading to a 27% increase in the overall exports (of goods and services, in US dollar terms) and real GDP growth of 12.5% in 2016/17. The boom in the oil sector spilled over into the non-oil sector of the economy as well, and the unemployment rate declined somewhat, to 11.7% in the first half of 2017/18.

However, Iran's immediate economic prospects have been adversely affected by the recent (May 2018) decision by the United States to withdraw from the JCPOA nuclear deal signed by the previous US administration under President Obama. The EU has repeatedly reiterated its adherence to the JCPOA deal (along with Russia and China), but has not been able to affect the US position. As US economic sanctions on Iran will be reinstated, Iran's trade and investment links established since 2016 will also suffer. This will also be the case for European companies dealing with Iran, which face the prospects of US sanctions against themselves. As a result, Iran's GDP growth is likely to stall or even reverse, as its oil production and exports will decline and access to international financial markets will deteriorate yet again.

The current geopolitical climate will do little to solve the long-standing structural weaknesses of Iran's economy, above all excessive dependence on the oil sector. Oil revenues account for around half of the total revenues of the central government budget and form the basis of the National Development Fund of Iran (NDFI). In addition, the banking sector is weak and the lack of Correspondent Bank Relations (CBRs) remains a big problem. This has been a crucial obstacle in accessing a substantial part of oil revenues, resulting in depreciation and inflationary pressures.