LEGAL UPDATE: February 2024
From the beginning of this year until the end of February, Iran engaged in trade with 15 neighboring countries, amounting to a total value of $55 billion. Out of the total trade exchanges between Iran and its neighboring countries, $25.844 billion were attributed to exports, while $29.431 billion were allocated to imports.
Comparing the 11-month period of this year to the same period last year, Iran’s exports to neighboring countries such as Iraq, Turkey, Republic of Azerbaijan, Turkmenistan, Armenia, Kuwait, Qatar, and Saudi Arabia decreased by 3% in terms of weight and 9% in terms of value.
Conversely, Iran experienced an increase in exports to the United Arab Emirates, Pakistan, Afghanistan, Oman, the Russian Federation, Kazakhstan, and Bahrain. For instance, in 2023, Iran’s exports to the UAE witnessed a notable surge, driven by various commodities such as petrochemicals, metals, and agricultural products.
Overall, exports in Iran averaged $17,479.72 Million from 1974 until 2023, reaching an all-time high of $38,751.00 Million in the second quarter of 2011 and a record low of $3,112.00 Million in the first quarter of 1999.
On the other hand, Imports from these neighboring countries increased by 11% in weight and 15% in value. Moreover, the most significant percentage increase in imports, in terms of value, was observed from the following neighboring countries: Armenia, Iraq, Turkmenistan, Qatar, and Russian Federation. Specifically, these countries are mainly suppliers of natural gas, electricity, and food products to Iran.
Imports in Iran averaged $13194.21 Million from 1974 until 2023, reaching an all-time high of $26131.00 Million in the first quarter of 2011 and a record low of $2917.00 USD Million in the second quarter of 1999.In parallel, Iran main imports are: non-electrical machinery, iron and steel chemicals and related products, transport vehicles, and electrical machinery, tools and appliances. Conversely, oil and natural gas constitutes Iran’s most important exports, accounting for 82 percent of the country’s export revenues. Additionally, other exports include chemicals, plastics, fruits, ceramic products and metals.
Customs data indicates a 35% increase in foreign transit through Iran compared to the previous year. The highest volume of foreign transit through Iran in the current year occurred at the Shahid Rajaei Special Economic Zone Customs, showing a 9% increase from the previous year. Parviz Khan has emerged as the second-largest transit gate in Iran, following the Shahid Rajaee Port Customs. During the period under review, the Parviz Khan border has emerged as a new transit gateway in Iran, and in the first 11 months of this year, foreign transit from the Parviz Khan Customs has grown by 363 percent to reach 3.492 million tons, ranking as the second major origin customs for foreign transit after the Shahid Rajaee Special Economic Zone Customs. The exports included fruit and vegetable, dairy products, cakes and cookies, metal and plastic products, tiles and ceramics, and construction materials.
several customs, including Bashmaq, Bazargan, Sarakhs, Bileh Savar, and Jolfa, ranked among the top ten customs for foreign transit volume. The total foreign transit through Iran, 14,236,000 tons were transited through these ten customs, accounting for 88.31% of the total transit. Among these customs, transit through Bazargan, Bileh Savar, and Jolfa decreased by 12.40%, 3.68%, and 2%, respectively, compared to the previous year.
Moreover, the new Astara Bridge plays a significant role in boosting north-south foreign transit, as the local economic officials have said that the bridge plays a major role in reducing traffic jams at the shared border for traders and travelers. In the current year, transit through the Astara Customs increased by 28%, and through the Bandar Astara Special Economic Zone by 86% compared to the previous year. In other words, according to the data of Iran Customs Administration, Iran exported about 102 million tons of non-oil products worth $36.4 billion in 9 months. Exports of non-oil products decreased by 0.68 percent in value terms and by 26.5 percent in weight terms year-on-year.
The fourth meeting of the Iran-Hungary Joint Economic Committee in Tehran concluded with the signing of a comprehensive cooperation MOU, with senior officials and business leaders from both nations in attendance. Alongside, four additional memorandums of understandings (MOU) were signed to bolster economic collaboration.
In the meeting, the vital need to strengthen banking ties between Iran and Hungary for enhanced bilateral relations was stressed. The Hungarian government was urged to boost support for private sector operators from both countries. Highlighting the significance of cooperation agreements for business ties, the importance of supporting private sector companies was emphasized. Authorities from both nations were urged to address challenges and foster stronger relations between their private sectors. Additionally, the essential role of the private sector in achieving government goals for commercial interactions was noted.
Both nations affirmed their commitment to enhancing bilateral trade cooperation, recognizing the challenges of international sanctions. Despite these obstacles, they emphasized the importance of maximizing collaboration in unaffected areas. Hungary expressed eagerness to expand cooperation with Iran in agriculture and food, intending to issue over 5,000 transportation permits annually to Iranian firms to streamline trade and foster stronger economic ties.
During the event, Iran’s Trade Promotion Organization highlighted its support for foreign trade development, particularly for Iranian and foreign private sector companies. Plans to establish Iran's commercial attaché in Budapest were announced, along with a call for continued meetings between the specialized committees of the Iran-Hungary Joint Economic Committee. The Iran Chamber of Commerce was urged to monitor outcomes and address challenges promptly, with the assurance of swift resolution by the Trade Promotion Organization.
India expressed readiness for new investments in Iran's transportation and transit sectors, extending an invitation to the Iranian minister for a visit. Chabahar Port, Iran's sole oceanic port on the Gulf of Oman, holds significant political and economic importance, with ongoing development efforts to boost maritime trade. The port, featuring terminals such as Shahid Kalantari and Shahid Beheshti, is strategically located in Iran's Sistan-Baluchestan Province, enhancing connectivity with Kabul and Central Asia under a trilateral agreement signed with Afghanistan in 2016.
In a unique arrangement, India operates in Shahid Beheshti Port through a build–operate–transfer (BOT) contract, marking the first instance of 100% foreign investment in one of Iran's ports. The collaboration includes the installation and operation of modern loading and unloading equipment. The first consignment of Indian equipment, valued at $8.5 million, arrived in Chabahar in January 2021. Chabahar Port continues to be viewed as a golden opportunity for India to expand its economic ties, playing a pivotal role in regional trade exchanges across West Asia, Eurasia, and Europe.
In its latest report on Iran's macroeconomic indicators, the International Monetary Fund (IMF) highlighted a notable development concerning Iran's oil production in 2023, indicating that it surpassed initial projections. This unforeseen increase in oil production contributed significantly to the country's economic growth, prompting the IMF to revise its estimate for Iran's economic growth in 2023 to 5.4 percent, a substantial upward adjustment from its previous forecast of 3.0 percent. This positive economic momentum is reflected in Iran's Gross Domestic Product (GDP), which outpaced the economic growth recorded in 2022 by approximately 1.6 percent, as detailed in the IMF's World Economic Outlook quarterly report.
The IMF has revised its forecast for Iran's economic growth in 2024, raising it from 2.5 percent, as projected in October, to 3.8 percent. These upward revisions underscore Iran's resilience and potential for economic expansion amid global economic headwinds.
Iran's economic growth contrasts with a broader global economic slowdown, where developed economies experienced an average growth rate of 1.6 percent in 2023, down from 2.6 percent in 2022. Conversely, developing countries saw a more robust average growth of 4.1 percent, highlighting Iran's relatively strong economic performance compared to its peers.
Regionally, West Asian economies saw modest growth, averaging 2.0 percent, with Saudi Arabia experiencing a -1.1 percent economic contraction. Notable economic growth figures for other countries in 2023 include the USA at 2.5 percent, Germany at -0.3 percent, France at 0.8 percent, the UK at 0.5 percent, China at 5.2 percent, India at 6.7 percent, Russia at 3.0 percent, Brazil at 3.1 percent, Turkey at 4.0 percent, and Pakistan at -0.2 percent.
