Comments on the Iranian Economy - April 9th, 2014

(drawn from press reports and official publications)

By Dr. M. Javad Ardalan (ardalan@oxpe.co.uk)

Director of Oxford Persian Institute (www.oxpe.co.uk)

Economy

The Central Bank of Iran (CBI) announced the inflation rate for the past Iranian year (20 March 2013 to 20 March 2014) as 34.7%. However, the Iranian Statistical Centre announced a figure of 32.1% for the period. The difference between the figures is use of different methods in sampling and of different weightings of geographical areas in the calculations. Both figures show that the government has kept its pledge to keep the inflation rate under 35% for the past Iranian year.

Politics

Iranian Foreign Minister Mohammad Javad Zarif said Iran and the world powers were almost in agreement after the latest round of talks on the nuclear programme in Vienna. However, US Secretary of State John Kerry's comments in Washington highlighted Western concerns about Iran's nuclear intentions and the wide divisions between the two sides that could still thwart a deal.

In a meeting with nuclear scholars in Tehran, Iran's supreme leader Ayatollah Ali Khamenei has backed talks with world powers but warned that Iran will never give up its nuclear programme. He said Iran had agreed to the talks to "break the hostile atmosphere" with the international community.

In other news, on Monday, the US Senate unanimously passed a bill that would bar Mr Hamid Aboutalebi, the nominated Iranian envoy to the UN, from entering the US, as he was a part of the Muslim student group which seized the US embassy in Tehran in 1979, though he himself denied the allegations. This will damage the ongoing negotiations between Iran and the US, as a number of newspapers in Tehran, including the conservative Kayhan, has criticised the government in Tehran.

Oil and Gas

Iranian authorities are unhappy with the significant delay in getting the South Azadegan oil field up and running by the Chinese contractor, CNPCI. Iran shares the oil filed with Iraq and the latter has increased the production from the field to more than 210,000 barrel a day. Iran currently can only produce about 50,000 barrel a day. Oil Minister Bijan Zangeneh has met President Rouhani regarding the matter. He has also given a 90-day notice to CNPCI to accelerate the process or be prepared to leave and terminate the contract.

Currency Market

The official (CBI) exchange rate is 1 GBP equal to IRR 42,704, 1 Euro is equal to 35,165 and 1 US dollar is equal to IRR25,500. The market price is IRR 51,480 per GBP, IRR 42,790 per Euro and IRR 30,990 per US dollar as at 9 April 2014.

This content does not necessarily express the views of The British Iranian Chamber of Commerce. The views and opinions expressed are those of the author.