Document Type : Research Article
Authors
1
Department of Economics, Faculty of Management and Economics, Islamic Azad University, Science and Research Branch, Tehran, Iran
2
Department of Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran
10.22084/aes.2025.31534.3826
Abstract
Aim and Introduction:
BRICS Plus, comprising around 45 percent of the world’s population, 26 percent of geographical area, 17 percent of global trade, and nearly 32 percent of world GDP (PPP), has emerged as a significant actor in the global economy. Iran’s official accession to this alliance constitutes a strategic geopolitical and economic move with the potential to generate substantial and multidimensional impacts on its macroeconomic performance. Despite this importance, no independent study has specifically examined the implications of Iran’s membership in BRICS Plus. This research addresses that gap by analyzing how reciprocal tariff liberalization with BRICS Plus members could affect Iran’s GDP, household income, inflation, and overall welfare.
Methodology:
The study employs a multi-regional Computable General Equilibrium (CGE) model based on the Global Trade Analysis Project (GTAP) framework and version 10 of its database. The model incorporates inter-sectoral and interregional linkages, allowing for a realistic simulation of policy shocks. Several scenarios were constructed in which tariffs between Iran and BRICS Plus members were reduced by 10 to 100 percent, enabling an assessment of both the direction and magnitude of potential macroeconomic outcomes.
Findings:
The simulations reveal that Iran’s participation in BRICS Plus, accompanied by gradual tariff reductions, could partially mitigate the adverse effects of international sanctions. Results indicate an increase in real GDP (0.16% to 1.59%), household income (0.15% to 1.46%), and overall welfare (USD 551 million to USD 5.5 billion), along with a decline in inflation (0.29% to 2.90%). These findings suggest that trade liberalization within BRICS Plus has the potential to strengthen Iran’s economic resilience and improve consumer welfare.
Discussion and Conclusion:
The evidence highlights that Iran’s accession to BRICS Plus represents a viable pathway to enhance economic stability, diversify trade partnerships, and integrate into emerging markets. To maximize these benefits, policymakers—particularly in the industry and mining sectors—should adopt targeted trade liberalization strategies with BRICS Plus members. Harnessing the industrial and technological capacities of partners such as China, India, and Russia could foster productivity growth, boost exports, attract investment, and generate employment opportunities. Ultimately, while membership in BRICS Plus cannot substitute for domestic reforms, it can serve as a strategic instrument for improving Iran’s macroeconomic performance and advancing its long-term development prospects.
Keywords
Main Subjects
)