Economy, Domestic Economy

Nobel Laureate Says Brexit Impact Insignificant for Iran

Nobel Laureate Says Brexit Impact Insignificant for Iran Nobel Laureate Says Brexit Impact Insignificant for Iran

Britain’s vote to leave the European Union is an unprecedented development, but will have little impact on Iran’s economy.

“I do not think Britain leaving the EU should be considered a major incident for the world, Iran in particular,” economist and Nobel Prize Laureate Robert E. Lucas Jr told Tasnim news agency.

He says the vote is even unlikely to affect the economy of the United States, which is a much bigger trading partner of the European country than Iran. Iran’s annual trade with the United Kingdom currently amounts to less than $1 billion.

In a historic referendum on Thursday the Brits decide in favor of parting ways the exclusive club after 43 years. The 51.9% vote in favor or Brexit was a razor-thin victory. The ‘Remain’ camp garnered 48%.

As a consequence, the pound sterling fell more than 2%, the euro took a hammering and stocks dropped as vote for Brexit drove investors to seek safety in the yen, gold and low-risk government debt.

“Although the euro depreciation will create some extra cost for Iran, since the major part of euros that Iran earns is spent on imports from Europe, its depreciation against the US dollar will, in practice, have little effect on Iran,” Mehrdad Emadi, a consultant at the UK-based Betamatrix International Consultancy said in an interview with the Baku-based Trend News Agency.

“The euro’s value oscillation against other key currencies was a result of the British people’s vote to quit the European Union. I think Brexit will make Europe’s economy more vulnerable in the mid-term. In the meantime, the vulnerability will increase the oscillation of the euro, which in turn will increase the risk for Iran.”

The EU used to be one of Iran’s top trading partners before sanctions were imposed over its nuclear program. With the removal of sanctions in January, European countries and companies are keen on resuming normal trade with Iran’s 80-millilon strong market.