Iran talking to EU businesses about future investment, Seif says

Bloomberg

By Svenja O’Donnell

Iran is in discussions with European and Asian businesses about potential investment in the country once sanctions are lifted, central bank governor Valiollah Seif said.

Iran, whose economy has been crippled by penalties imposed by the West over its refusal to halt uranium enrichment, has maintained a dialog with investors in countries it did business with in the past, and is confident it could attract investment in the automobile, steel and heavy machinery industries, Seif said.

“France, Germany and Italy have had extensive economic relationships with Iran and they have kept that relationship,” Seif said in an April 12 interview in Washington during the International Monetary Fund’s spring meetings. “They are in contact and in discussion on projects and we expect that once sanctions are lifted they are waiting to make investment in all different areas.”

Iran and world powers struck an initial accord in November that broke a decade-long diplomatic stalemate, setting limits on the country’s nuclear program in exchange for about $7 billion in relief from sanctions over six months. A French delegation of more than 100 business representatives met with top Iranian trade officials in February in Tehran to explore opportunities.

Economic Potential

“When sanctions are lifted we think that there will be a lot of investment opportunities because of Iranian economic potential,” Seif said, though he added China had taken over some of Iran’s market share.

Iranian President Hassan Rouhani, who took office in August, is under pressure to find relief for the country from the sanctions, which had caused sharp reductions in oil output and the value of the currency.

While Rouhani has endured a series of setbacks and retreats on his domestic agenda, Iran has made some progress on improving an economy that’s suffered from high inflation and shrinking growth.

The country’s economy will stop contracting this Iranian year, which started last month, and gross domestic product is expected to increase 3 percent the following year, Seif said.