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BMI View: The removal of most of the sanctions previously imposed on Iran will be the biggest factor
affecting trade in the country over the medium term as Iran's government looks to negotiate deals that
benefit the economy and, by extension, the freight industry as a whole. Iran's economy will see a notable
acceleration in growth in 2016 and beyond; however, because of huge infrastructure deficits and other
major impediments such as corruption, it will be limited to around 5-6% over the coming years. Road
freight will lead the way in the freight mix in 2016, seeing year-on-year growth of 2.8%.
? The removal of all UN and almost all EU sanctions, as well as all US secondary sanctions from January
2016, has allowed non-US companies to invest in the country for the first time in five years. We envisage
total trade to grow by 4.5% year-on-year in 2016 and then by 6.0% in 2017.
? Increased interest and funding pledges for Iranian infrastructure from regional nations in Europe, the
Middle East, and Asia will be a significant driver of accelerated growth in infrastructure investment over
the coming months. Recent high-profile deals (see below table) include a Kremlin-backed USD2.5bn
loan designated for rail and power improvements and a commitment on the part of the Indian government
to extend USD500mn for the development of port and rail infrastructure at Chabahar.
? Iran stands to benefit from Chabahar, as it will get an enhanced port from which to export more goods to
India and the Asia-Pacific region at a time when Iran is seeking to reintegrate itself into the global
economy. Iran would also benefit from increased Indian investment. For their part, it seems that Indian
firms are seeking to gain first-mover advantage in one of the world's biggest new emerging markets at a
time when Western companies are still hesitant about entering Iran.
? We forecast a rapid uptick in economic growth in Iran as large-scale investment and rapidly rising
exports follow the removal of sanctions. Iran has huge potential across almost all sectors, not just oil and
gas which attracts most of the attention, and we highlight industries related to the consumer - especially
autos and food and drink. Pent-up demand, a youthful population, a skilled workforce, and a strong
hydrocarbon and consumer story all make Iran one of the most positive and relatively well-balanced
economic growth stories in the Middle East over the next decade.