TEHERAN (AFP) - Iran's ultraconservative Ebrahim Raisi will be inaugurated on Tuesday (Aug 3) as the new president of the Islamic republic, a country mired in deep economic crisis and hit by crippling US sanctions.

He replaces moderate president Hassan Rouhani, whose landmark achievement was the 2015 nuclear deal between Iran and six world powers.

Mr Raisi, 60, will have to tackle the nuclear talks aimed at reviving the deal from which the United States unilaterally withdrew.

Two days after Tuesday's inauguration by the country's supreme leader Ayatollah Ali Khamenei, Mr Raisi will take the oath before parliament.

He won June's election when more than half the voters stayed away after many political heavyweights were barred from standing.

A former judiciary chief, Mr Raisi has been criticised by the West for his human rights record.

Iran's economic problems, exacerbated by the American sanctions, will be the new president's greatest challenge, according to Professor Clement Therme, a researcher at the European University Institute in Italy.

"His main objective will be to improve the economic situation by reinforcing the Islamic republic's economic relations with neighbouring countries," he said.

"The goal would be to build a business model that would protect Iran's economic growth from American policies and decisions."

Prof Therme believes that Mr Raisi's main priority will be to "remove US sanctions" so Iran can bolster trade with its neighbours and non-Western countries such as China and Russia.

The 2015 deal saw Iran accept curbs on its nuclear capabilities in return for an easing of sanctions.

But former US president Donald Trump unilaterally withdrew from the accord three years later and ramped up sanctions again, prompting Teheran to pull back from most of its nuclear commitments.

Mr Trump's successor Joe Biden has signalled his readiness to return to the deal and engaged in indirect negotiations with Iran alongside formal talks with the agreement's remaining parties - Britain, China, France, Germany and Russia.

The US sanctions choked Iran, including by seeking to stop its oil exports, and the economy contracted by more than 6 per cent in both 2018 and 2019.

This was a blow to Mr Rouhani who had hoped to liberalise the economy and develop the private sector.

In the winter of 2017-2018, and again in 2019, street protests sparked by economic woes rocked the country.

And in July this year, demonstrators in the oil-rich Khuzestan province, which has been hit by drought, took to the streets to vent their anger.

The economic malaise has been exacerbated by the coronavirus pandemic, which has left many Iranians struggling to get by.

Iranian reformist economist Saeed Laylaz said that the outgoing president was an idealist in his approach to the West.

"Rouhani believed he would be able to solve all the country's problems quickly," said Dr Laylaz, who has acted as an adviser to Iranian presidents. He believes that Mr Raisi will choose a different path.

After his election, Mr Raisi made clear that his key foreign policy would be to improve ties with regional countries.

In mid-July, Mr Rouhani said he hoped his successor can clinch a deal to lift US sanctions and conclude nuclear talks.

But Mr Khamenei, who will preside over Mr Raisi's inauguration on Tuesday and whose word is final in policy matters, has warned against trusting the West.

Mr Raisi himself has already said he will not negotiate with the other parties to the nuclear deal, and indirectly with the US, just for the sake of negotiations.

His government will support talks that "guarantee national interests", he has said.

Six rounds of nuclear talks between Iran and world powers were held in Vienna between April and June. The last round concluded on June 20, and no date has been set for another.

Officials in Teheran said there would be no new talks until Mr Raisi assumed office.

According to Prof Therme, the new administration in Teheran, where the ultra-conservative camp deeply distrusts the US, has no wish to press things.

There is a will in Teheran "to show the American side there is no urgency for a quick compromise", he said.

The new government also wants to show "it can clinch a better deal than the previous one", Prof Therme added.

According to Dr Laylaz, the future of the nuclear deal will be one of the factors that will affect the fate of the economy.

"If Iran declares its intention not to pursue the negotiations, the sanctions will remain," he said.

But he also expects Washington and Teheran to reach a compromise. "Iran and the United States cannot continue with the status quo."