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Growth in Iran's non-oil exports linked to sanctions relief

Iran may finally be ready to expand its non-petroleum exports, especially if there is progress in the nuclear talks.
A tourist visits the the Chogha Zanbil Ziggurat near Susa, in Khuzestan province, southwestern Iran September 29, 2011. Picture taken September 29, 2011. REUTERS/Raheb Homavandi  (IRAN - Tags: SOCIETY TRAVEL) - RTR2S198

In the last few years, amid economic decline and hardships, one positive indicator has been the Iranian economy’s continuous trade surplus. Many expected the country’s export performance to collapse as a result of external sanctions. However, the sharp decline in crude oil exports was compensated for by the decline in imports and the modest growth in non-oil exports.

According to the March 2014 issue of Eqtessade Iran magazine (Iran Economics), the country’s trade surplus is projected to reach $40 billion in the Iranian year 1392 (that ended on March 20), up from $31 billion the previous year. Furthermore, growing exports will lead to a trade surplus of $62.5 billion in the new Iranian year 1393. In this picture, Iran’s non-oil exports — meaning all exports with the exception of crude oil and gas — will grow from $33 billion in 1392 to $37.7 billion in 1393. Based on the projections of Iran Economics magazine, non-oil exports will have a 11.5% share in the country’s nominal gross domestic product (GDP) in the new Iranian year. In 2009, non-oil exports represented a 7.2% share in the country’s GDP, only to fall as a result of sanctions and currency devaluation. The hardest hit non-oil export sectors were the petrochemical and automotive industries. Incidentally, the so-called plan of action agreed upon by Tehran and the P5+1 introduced a suspension of sanctions on the two mentioned sectors.

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