The Iranian government has been far more effective than the American administration in galvanising public opinion in support of the nuclear agreement. According to a recent survey by IranPoll.com, a Toronto-based polling company, for the University of Maryland, three in four Iranians support the nuclear agreement and give high marks to Iran’s President Hassan Rouhani for making it happen.

The deal has helped Rouhani consolidate his political standing, with 89% of Iranians expressing favourable attitudes toward him and 60% saying they want the president’s allies and supporters to win control of parliament in elections due in February. Much of this support, however, appears to rest on misperceptions about Iran’s commitments under the agreement and on unrealistic expectations about its likely economic benefits.

A majority (56%) incorrectly believe Iran has not agreed to limit its nuclear research and development activities. Sixty-one percent incorrectly believe there are no conditions under which the International Atomic Energy Agency is permitted to inspect Iranian military sites. A majority (59%) are also under the false impression that the agreement means all US sanctions, even those unrelated to Iran’s nuclear programme, will be eventually lifted.

While slightly more than half of those who don’t hold these misperceptions also approve of the deal, the situation may make Rouhani vulnerable as Iranians become more informed about Iran’s commitments under the nuclear agreement. His future standing is likely to be determined by how he balances a short-term response to high public expectations and a determination to uses his popularity to push for painful economic reforms.

It is only natural for Rouhani to be tempted to use the windfalls of the nuclear agreement - unfrozen overseas assets, higher oil sales, and higher foreign investment - to produce short-term tangible improvements in people’s lives. Considering that 63% of Iranians have come to believe that the nuclear agreement will create significant improvements in their standard of living in a year or less, Rouhani may feel his political future depends on quick results.

This is exactly the trap previous president Mahmoud Ahmadinejad fell into when oil prices skyrocketed in 2008. Instead of using the extra oil revenue to tackle Iran’s underlying economic ills, Ahmadinejad decided to provide cash handouts to all Iranian citizens. While these were intended to ease the phasing out of subsidies of everyday items including bread and energy, far more was paid out than was saved by removing some subsidies. According to an IMF study, the balance between handouts and savings over subsidies produced an annual fiscal deficit equivalent to 1.6-1.8% of GDP in the three years beginning in the Iranian year 2010-11.

The handouts initially boosted Ahmadinejad’s popularity, but they triggered one of Iran’s worst ever episodes of hyperinflation and currency depreciation, resulting in a decrease in people’s purchasing power. Rouhani is now at a similar juncture and – amid much lower oil prices – must decide between pandering to people’s short-term expectations or tackling Iran’s more fundamental economic challenges.

Iran’s economy will continue to suffer from a range of endemic problems even after sanctions are lifted. These include a large inefficient public sector, an underperforming private sector, widespread corruption, burdensome bureaucracies, over-dependence on oil revenue and costly subsidies. These factors have significantly diminished Iran’s competitive edge, leaving Iran’s business environment ranked 130 out of 189 countries in the World Bank’s 2015 Doing Business Report. Without bold and often painful structural reforms, the impact of sanctions relief will probably be negligible and any benefit to people’s livelihoods short-lived.

Instead of focusing on people’s short-term expectations, Rouhani should channel funds and investment into competitive and export-oriented industries including oil, gas and petrochemicals. Investment is also needed to overhaul the infrastructure and retrain employees to move out of inefficient industries. Tourism, education, and health all need higher funding as well.

While all previous Iranian presidents have tried to reform Iran’s economy, none had the competence, capacity to extract resources from the population, and favourable circumstances needed to enact and sustain economic reforms. Rouhani may have all these. He has already established credibility by fulfilling his most important campaign promise to have sanctions lifted without abandoning the nuclear programme, and he can use this political capital to lead Iran out of its deep-rooted economic woes.

Amir Farmanesh is the co-founder and president of IranPoll.com. Ebrahim Mohseni is a research associate at the Center for International and Security Studies at the University of Maryland. The Tehran Bureau is an independent media organisation, hosted by the Guardian. Contact us @tehranbureau