Iran's economy eyes nuclear deal
By Dalga Khatinoglu
Amid optimistic expectations regarding the politic deal between Iran and P5+1, the Iranian rial rose against U.S. dollar by about 4 percent.
At the same time the Tehran Stock Exchange main index (TEPIX) rose by 6 percent on Mr.28 compared to several days ago.
Each USD is sold at 32,740 rials, while TEPIX stood at 64,939 points on Sunday.
On Sunday the Russian and Chinese foreign ministers will join nuclear talks with Iran. U.S. Secretary of State John Kerry canceled his planned return to the U.S., while Catherine Ray EU spokeswoman tweeted early Sunday that High Representative of the EU for Foreign Affairs and Security Policy Federica Mogherini who leads the P5+1 is holding a working breakfast with French and German foreign ministers.
All parts were optimistic at least until Saturday, while Mogherini told reporters that "we have never been so close to a deal. We still have some critical points that need to be solved, and we are working over the hours, over the weekend to bridge the gaps".
The self-imposed deadline for political agreement, which is expected to be documented and singed by P5+1 and Iran will end by the end of March.
For Iran which experienced around 8 percent GDP contraction during a period between imposing Western sanctions in mid-2012 and reaching an interim nuclear deal in November 2013, it's vital to reach a deal to ease biding sanctions, especially with an estimated 1.5 percent economy growth in 2014.
The country's second largest industry, the auto making sector, resumed again by a 54 percent growth to 1.146 million cars during last 12 months, while the inflations rate reached 15.6 percent last month. This figure was about 36 percent when President Hassan Rouhani took office in mid-2013.
On the other hand, Iran needs its above 100-billion blocked reserves abroad to be released by elimination of sanctions on oil export and banking transactions.
The country needs also to resume crude oil export, which has been halved since 2012 to a little more than 1 million barrels per day. Reuters reported last week that Iran stored above 30 million barrels of oil on tankers. Then the country can at least increase the oil sales after the political deal, though the restrictions over insurance, payments and the glut in oil market might disrupt rising of Iran's oil export immediately.
Some in the U.S., as well as some allies like Israel, Saudi Arabia are not satissified by the current talks which doesn't remove Iran's nuclear activities entirely, but the deal would impose restrictive measures on sensitive activities like enriching uranium, ceiling of uranium deposits, some research fields, as well as producing plutonium in the Arak heavy water plant for one or two decades.
Everything seems to be in place for a political breakthrough aimed to paving the way towards a comprehensive nuclear deal after a 12-year dispute between Iran and the international community,
However, the possibility of achieving a comprehensive nuclear deal which is planed to specify the technical details of agreement by June.30 remains uncertain.
Dalga Khatinoglu is an expert on Iran's energy sector, head of Trend Agency's Farsi news service. Follow him on @dalgakhatinoglu