Daily Management Review

German exports to Iran increased after lifting of sanctions


08/22/2016


Germany increased its exports to Iran in the first half of 2016 by 15% compared to the same period last year. Total figure amounted to € 1.13 billion, according to data of the Federal Statistical Control of the country (Destatis).



Luigi Rosa
Luigi Rosa
Once international sanctions against Iran were lifted, Germany increased its deliveries to the country; main production is machinery and equipment.

"There is a huge demand for manufacturing equipment in Iran", - said representative of the German-Iranian Chamber of Commerce Michael Tockuss, adding that demand for chemical products and electrical engineering is also high.

"There is a growing demand of renewable energy technologies, mainly wind power", - said Tockuss. According to him, reluctance of banks to finance large deals between German and Iranian business is gradually eroding.

In addition, Tockuss said that exports to Iran will continue to increase in the coming months, and is expected to grow by 25% in total in 2016 and 30% in 2017.

In general, however, prospects for foreign trade are more vague. Exports to the United States and France - the two most important for the German market - in the first half of the year fell by 4% to € 53.4 billion, and by 2% to € 52.1 billion, respectively.

Exports to the UK, which is the third largest trade partner of Germany, remained at about € 44.8 billion in the first half of the year.

Demand from emerging markets was discreet. German exports to China increased by only 1% to € 36.3 billion, to Brazil - fell by 18% to € 4,4 billion, to South Africa - fell by 11% to € 4,4 bln.

Head of German Federal Association of Wholesale and Foreign Trade (BGA) Anton Börner said that exports in the current year increased less than expected due to external risks, including decision of Great Britain to leave the European Union, and the uncertainty in the run-up to elections in the US and France.

In 2015, German exports grew by 6.4% yoy, mainly due to strong demand from other EU countries. Foreign trade contribution to the overall growth rate (1.7%) last year amounted to 0.2 percentage points.

The German government expects to maintain the same rate of economic growth this year thanks to growing domestic demand, while exports are unlikely to contribute significantly to GDP growth.

Meanwhile, export of oil from Iran has reached 2.5 million barrels per day. Thus, the country's share in the oil market has returned to the pre-sanctions levels, said first vice-president of Iran Eshaq Jahangiri.

"Crude oil exports rose to 2.5 million barrels per day. Iranians were able to increase level of oil production of the country, which fell during the sanctions, and thereby restore the previous market share", - quotes by NIOC agency. He noted that some oil-producing countries, in particular from the Persian Gulf, are faced with "enormous" problems as a result of falling oil prices. At the same time, Iran's economic stability prevailed thanks to effective management, Jahangiri said.

Currently, Iran produces about 3.8 million barrels of oil per day. Earlier, Iranian authorities have repeatedly stated their intention to increase oil production to the pre-sanctions level.

source: reuters.com






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