After suffering from sanctions for years, Iran is in urgent need of capital. Our expert, Kaveh Taghizadeh, takes a look at the latest developments.
Iran is continuing to become an integral part of the global economy. In January 2016, most Western sanctions were lifted. While the initial curiosity was immense, difficulties to transfer money somewhat hampered enthusiasm. However, the situation is improving steadily as our expert Kaveh Taghizadeh explains. Investments are starting to pour in, and they are badly needed – to the tune of hundreds of billions of dollars.
To ease transactions and facilitate flows, Iranian banks are reaching out to Germany and are successfully establishing subsidiaries. Also, for bonds, Germany appears to be the destination of choice, while Great Britain with its strong US-connections seems too risky to deal with.
The effort to revive the banking industry is strong and the progress noticeable. It is not a surprise that the mood on a recent banking conference in Iran sponsored by KPMG was very positive.
Sectors booming most are the hospitality industry due to the surge in tourists and business people, the solar industry as well as petrochemicals.
With the populace having granted the government of Hassan Rouhani a second term, the economic outlook for Iran remains positive. The short period of insecurity just before and after the US election has passed and business activity is increasing. Shifting to international accounting standards is also helpful.
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