Page 43 - IRANRptAug18

9.1.6 Fast moving consumer goods sector news
The prices of imported fast moving consumer goods (FMCG) currently on shelves in Iran can be legally increased by a maximum of 17%, according to an interpretation of new rules given by Ali Avazpour, the managing director of the Chamber of Guilds of Iran, Mehr News reported on July 18. The price tags faced by consumers of imported goods on both legitimate and black markets have fluctuated at unprecedented rates in recent weeks given wild swings in the value of the collapsed Iranian rial (IRR), which on the now illicit unofficial market stood at IRR82,500 to the dollar by midday, local time, on July 18. Iran’s currency nosedived after it became clear that with the use of heavy sanctions the US is waging economic warfare on the country in order to try and force Tehran into renegotiating the nuclear deal.
The announced 17%-maximum applies to both retailers and wholesalers. However, many traders will likely ignore the warning as, unlike in the case of domestially produced products, prices on imported items are not printed on packaging. Avazpour reportedly further advised that any price rises for imported goods going beyond the given threshold would be dealt with via legal action undertaken by the General Inspection Organization (GIO), an ombudsman linked to the Judiciary of Iran.
Iranian importers of foodstuffs have been left in a difficult position in recent months because they have no entitlement to accessing the official government rial-to-the-dollar rate of IRR42,000. This has pushed such importers to secure items at negotiated exchange rates around double the official rate.
9.1.7 Property sector news
Unofficial numbers indicate that since March more than 1,000 apartments and villas have been bought by Iranians in Turkey, Iran Labour News Agency reported the head of the Iran-Turkey Chamber of Commerce as saying on July 31. The collapse in the value of the Iranian rial (IRR) since the US announced its intention to attack Iran’s economy with heavy sanctions has left Iranians scouring the investment horizon for secure assets.“Some of our compatriots have begun to invest in the [Turkish] property sector for more value [than can be found in Iran],” chamber head Reza Kami reportedly said. Turkey offers limited residency rights to those who invest in property in the country. It also awards the option of a Turkish passport to those who buy property worth more than $1mn. Importantly, Iranian passport holders enjoy visa-free access to the neighbouring state, with several thousand now calling the country home. The villas lately sold to Iranians are said to have an average price of $160,000 and are located in various cities of Turkey and not necessarily in seaside resorts.
Property sales in Tehran made strong gains in the second month of the Persian year (April 21-May 20), moving up 16.7% y/y, the Central Bank of Iran (CBI) said on May 28. The surge in property sales in Iran’s capital comes as Iranians look to stave off any further losses caused by the plight of the Iranian rial (IRR), down more than 50% in value on the black market over the past six months in the face of economic jitters triggered by hostility and impending heavy sanctions from the Donald Trump administration.
Property has always been seen as a safer bet in uncertain times in Iran.
As prices increase amid rising demand, Tehran developers often try to make units more affordable by cramming small apartments into a building.
In total, 19,100 residential units changed hands during the one-month period.
43 IRAN Country Report August 2018 www.intellinews.com