Page 18 - bne IntelliNews Country Report: Iran Dec17

The large increase in the current account surplus is because Iran is back in the spotlight after the nuclear deal last year, attracting more foreign direct investment mostly in the oil sector. Oil exports have increased significantly due to an increase in oil production from 3.2 million barrels per day in 2015 to 3.7 million in 2016 and an expected 4.2 million in 2017, the Tehran Times reported on April 21.
5.1.2 Import/export dynamics
Trade along railway corridor up 21.6% in 9M
EU-Iran trade up 75% y/y in 8M
Turkey-Iran trade up 11% y/y in H1
Trade along the already-open International North-South Transport Corridor (INSTC) has increased by 21.6% in the first nine months of the current Iranian year, according to a report by Fars News Agency. The figures for the previous nine-month period were not available. To hasten trade between the countries along the multi-national railway project, Iran announced on September 18 that it would slash the border tariffs by 50%, according to the Iran Railways Company (RAI) at the time.
Bilateral trade between the European Union and Iran increased more than 75% y/y in the first eight months of 2017, according to Eurostat, Mehr News Agency reported on October 22. Following the dropping of crippling sanctions imposed against Tehran prior to the implementation of the nuclear deal at the start of last year, European companies have been at the vanguard reviving trade links with Iran. Memoranda signed by European enterprises with Iranian companies and other entities in the past 12 months cover potential business worth more than €50bn.
However, problems in arranging and processing banking transactions continue to hamper trade and investment growth. Many large established banks fear unilateral US sanctions might eventually impact on them if they get into business with the wrong client in the eyes of the Trump administration.
According to the latest figures, Iran-EU trade stood at €13.6bn for January to August, compared to €7.5bn in the same period of 2016. The Eurostat report noted that EU countries imported some €6.5bn of items from Iran in the period this year, mostly consisting of oil and petrochemical products that enjoyed 144% growth y/y. EU exports to the Islamic Republic, meanwhile, notched up a 37% y/y increase to €6.66bn in the eight-month period. Sales from the EU to Iran in the same time span of the year before stood at €4.84bn.
Trade between Turkey and Iran stood at around $5.32bn during the first half of 2017, 11% up year on year, Donyaye Eqtesad reported on August 7. In total Iran exported $3.78bn worth of goods to Turkey during H1, registering a 72% rise y/y. Turkey exported $1.54bn worth of goods to Iran, marking a 41% decline y/y. Iranian exports to Turkey included oil, industrial goods, FMCG items as well as appliances. Turkey exported items to Iran such as clothing, automotive parts and fully assembled vehicles.
Turkey and Iran have resolved to try and triple annual bilateral trade to more than $30bn, Mehr News Agency reported on October 6. Currently the trade volume officially amounts to around $10bn, according to Turkey's Daily Sabah . The ambitious trade target was announced in the wake of Turkish President Recep Tayyip Erdogan's October 4 visit to meet Iran's president and supreme leader . Relations between Tehran and Ankara have necessarily intensified given that both sides find themselves opposed to the push by Iraq's
18 IRAN Country Report November 2017 www.intellinews.com