Monday , 10 August 2020

Foreign Investment In Iran More Than Halved Since US Sanctions

Radiofarda – A total of $784.6 million foreign finance has been directly invested in 55 projects in Iran in the past seven months, the Islamic Republic Ministry of Industry, Mine and Trade (MIMT) says in a new report.

In the same period in 2017, when Washington had not yet withdrawn from the Joint Comprehensive Plan of Action (JCPOA) or Tehran’s nuclear deal with world powers, the figure amounted to $1.88 billion.

Based on the data provided by the United Nations Conference on Trade and Development (UNCTAD), Iran succeeded in obtaining nearly $3.5 billion of Foreign Direct Investment (FDI) in 2018, which is almost 30% less than the previous year.

Earlier, MIMT used to report FDI developments in details, but for unknown reasons has recently decided not to do so.

One important investment sector in Iran is the vehicle manufacturing industry. Since the re-imposition of the U.S. sanctions on the Islamic Republic, the sector has been in crisis and struggling with a plethora of complications. However, the main foreign partners in this sector were French automakers that have suspended cooperation with Iran as a result of U.S. sanctions.

In the past seven months, the MIMIT report says, Iran automakers manufactured 394,000 sedans, which shows a 35% drop, compared with the same period in the previous year.

Meanwhile, the manufacturers of other vehicles, including trucks, buses, and pickups, have experienced sharper drops in their production.

In the meantime, the state-owned entities of the Islamic Republic have also significantly cut their investment in the last decade.

The amount of these investments in the period of 2000-2011, the International Monetary Fund (IMF) says, nearly equaled 5.2% of the country’s GDP. But this halved between 2012 and 2017.

Presently, the Iranian economy is struggling with 41%+ inflation and 9.5% negative economic growth.

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