Iran’s heavy reconstruction costs leave no money for consumer goods imports

Business Materials 27 July 2015 17:46 (UTC +04:00)

Tehran, Iran, July 27

By Mehdi Sepahvand -- Trend:

An Iranian economic figure says he does not believe in worries that once Iran's frozen assets are freed, a huge load of consumer goods will storm the country's markets.

Recently different entities as well as the media in Iran have been expressing worry that after Iran's frozen assets are freed, the resources will go into importing consumer goods.

During the previous Iranian presidential administration, huge imports of various consumer goods of the less-needed sort were rampant, causing cries of criticism from many who were affected.

"I do not believe in that hypothesis.... Reconstruction costs are way too large to leave any space for consumer goods," Mohammad Reza Behzadian, former president of Tehran Chamber of Commerce told Trend July 27.

"Iran needs 400 new airliners, for example, and a lot of money is needed to renovate the railways," Behzadian pointed out.

"So the country needs little consumer goods. It rather needs capital goods."

Also, he added, there is a large deficit and there are many debts to be paid to power plants, the electricity industry, etc., which are of priority over consumer goods.

After a July 14 comprehensive deal on its nuclear program, Iran is expecting the removal of international sanctions and the freedom of its assets overseas.

Iran's frozen assets abroad amount to $29 billion, Iranian Central Bank Governor Valiollah Seif said recently. He added that $23 billion of the Central Bank's assets are blocked in Japan, South Korea, and the United Arab Emirates, and $6 billion of the petrodollars are blocked in India.

About $34.85 billion worth of the country's total imported goods are intermediate goods, which shares about 68 percent in total imports, while consumer goods with $6.97 billion worth of total import shares 14 percent and capital goods with $9.17 billion shares 18 percent in Iran's total imports during last year.

Edited by CN