Page 25 - IRANRptNov20

Iran’s current account balance likely at -0.5% of GDP in 2020, says IMF
The International Monetary Fund (IMF) estimated in its updated World Economic Outlook in October that ​Iran’s current account balance as a percentage of GDP would likely be at the 1.1%, -0.5% and 0.3% for 2019, 2020 and 2021, respectively​, as a result of the impact of the coronavirus (COVID-19) pandemic.
The IMF estimated that the government held $112bn of foreign assets and reserves in March last year. It also indicated that Iran ran a current account surplus. The figures imply that Iran might withstand the sanctions without an external payments crisis.
But the IMF also noted that Tehran was having difficulty accessing some of its reserves as its relations with foreign banks were constrained by the threat of US sanctions. Meanwhile, sanctions could cut the current account surplus sharply given the severe disruption they are causing to trade.
5.1.2 ​Import/export dynamics
Iran targets billion dollar export goal after opening of Damascus trade centre
Iran, Iraq ‘settle energy debt with barter deal providing Tehran medicine and staples’
The Iran-Syria Joint Chamber of Commerce has announced a plan to export up to $1bn in Iranian products and machinery to Syria in the next 12 months following the inauguration in Damascus of the first Iranian Trade Centre, ISNA has reported.
Iran’s trade with Syria has remained strong since the Syrian Civil War ended in most of the country with Syrian President Basher al-Assad retaining power very much thanks to Iranian and Russian ground and air support. The Islamic Republic also remains crucial to Syria’s effort to avoid oil and fuel shortages. As part of the spoils of war, a good deal of Iranian and Russian companies have become firmly established in the Levantine market.
Keyvan Kashefi, head of the Iran-Syria Joint Chamber, announced the trade centre opening, saying: "The establishment of this centre is a step towards the realisation of one billion dollars in exports to Syria.
"This centre covers an area of ​​4,000 square meters in the free zone in the heart of Damascus. Iran opened this platform with the investment of the Chamber of Commerce of Mines and Agriculture."
Kashefi noted that Syrian cities such as Damascus, Aleppo, Homs and Latakia were now targets for Iranian business expansion.
Currently, 24 Iranian companies are represented by the trade centre in Damascus.
Iran and Iraq are to settle Iraq's energy debt to Iran through a barter deal under which Baghdad would supply Tehran with medicine and staples, official Iranian news agency IRNA reported on October 13.
Iraq pays for Iranian gas and electricity with desposits paid into Iranian accounts in Iraqi banks, but Iran is unable to access the funds because of US sanctions that freeze them. The barter settlement will thus sidestep this payment difficulty, Abdolnaser Hemmati, Iran’s central bank governor, was quoted as saying by the news service.
"Since these [barter] goods are among the country's essential requirements, they will be exempted from the unfair and unilateral sanctions," Hemmati added.
Iran's gas and electricity exports to Iraq are estimated at $4bn annually, out of total exports of $12bn, according to S&P Global Platts. Early this year, Iranian oil minister Bijan Zanganeh said Iraq's debt to Iran amounted to $2bn.
Iraq reportedly buys 1,200 MWh/d of electricity from Iran. In May, an Iranian
25​ IRAN Country Report November 2020 www.intellinews.com