Following the relaxation of sanctions and restrictions on financial transactions, announced on 14 July, the bank said Iran would now be able to export more oil and speed up its economic recovery.

“Just as the tightening of sanctions in 2012 led to a sharp decline in Iran’s oil exports and two years of negative growth, we expect the removal of sanctions to boost exports and revive the economy,” said Shanta Devarajan, World Bank chief economist for the Middle East and North Africa region.

The World Bank said it expects the Islamic republic to add about a million barrels of oil a day to the global market, lowering oil prices by $10 per barrel next year.

This means Iran’s economy, which was in recession for two years, will receive a major boost from increased oil revenues. This will significantly expand the economy by about 5% in 2016 from growth of just 3% this year, the bank projected.

But it called on Iran to put in place policies that would help the economy to make maximum use of this windfall and put it on a path to sustained growth.