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UNCTAD data ‘shows Iran’s FDI inflow fell 11% in 2020’
Iran saw a foreign direct investment (FDI) decline of around 11% y/y in 2020, according to United Nations Conference on Trade and Development (UNCTAD) data cited on June 23 by Tehran’s Financial Tribune. Information in UNCTAD’s World Investment Report 2021 reportedly showed the UN agency assessing Iran’s FDI inflow at $1.34bn compared to $1.508bn in 2019.
Iran saw FDI inflows of $3.37bn and $5.01bn in 2016 and 2017 after the signing of the landmark 2015 nuclear deal. However, foreign investors turned away from Iran after former US president Donald Trump pulled Washington out of the deal in May 2018 and warned such investors that they could face secondary sanctions if they continued to do business with the Islamic Republic. The FDI inflow fell to $2.37bn in 2018, UNCTAD said.
The UN body also estimated Iran's direct investment in other countries at $78mn in coronavirus-afflicted 2020, 8% lower than the $85mn seen the year before.
Iran has lately been posting data showing it is emerging from a recession that lasted almost three years, with the introduction of Trump’s swingeing sanctions the main factor in the economic decline.
6.0 Public Sector 6.1 Budget
Iran’s budget for Persian year ‘could be based on oil price of $40’
Iran’s budget deficit at 9.5% in 2020
Iran’s budget for the Persian year (starts March 21, 2021) could be based on an oil price of $40 a barrel, according to government spokesman Ali Rabiei.
“The revenue sources for the next year’s budget are not finalised yet by the government ... Our primary forecast for now is oil at $40 [a barrel],” Rabiei said in remarks on an official website, relayed by Reuters.
The extent of Iran’s oil sales on the grey market—Iran has to operate under the radar as the Donald Trump administration pursues its policy of using sanctions in an effort to drive Iranian crude off world markets—is a matter of conjecture. However, there is the prospect of US President-elect Joe Biden striking a new political deal with Tehran that would remove heavy US sanctions. Such an agreement is by no means guaranteed as things stand, but if it was achieved it could open the way for Iran to build up oil export sales to as high as 2mn b/d within around two years.
The Central Bank of Iran (CBI) estimated that Iran hit a government budget deficit of nearly 9.5% in 2020 from a 5.5% deficit in 2019. The International Monetary Fund (IMF), meanwhile, has also calculated that Iran's total budget deficit would be around $58bn.
30 IRAN Country Report December 2021 www.intellinews.com