Iran says new sanctions will not hurt economy

By Fredrik Dahl

TEHRAN (Reuters) - Iran said on Wednesday new U.N. sanctions on Tehran over its disputed nuclear plans would cause no damage to the economy, saying its firms could still secure trade finance and investment was rising.

"If we had any special difficulty in opening credit for merchants, the volume of investment in the country would not have increased compared with last year," Economy Minister Davoud Danesh-Jafari was quoted as saying by the ISNA news agency.

The U.N. Security Council voted on Monday to introduce a third sanctions resolution against Iran over its refusal to halt nuclear work that major powers fear is aimed at making bombs but which Tehran says is designed to generate electricity.

Economists say U.N. and separate U.S. punitive measures imposed on Iran since 2006 are making Western companies more wary of investing in the Islamic state even though it remains a magnet for oil majors because of its vast energy resources.

But Foreign Minister Manouchehr Mottaki said the new sanctions would not affect Iran's economy: "Within the last year we have signed and concluded economic contracts with so many companies from around the world," he told reporters in Geneva.

Asian and other firms have continued to sign energy deals with Iran, the world's fourth largest oil producer which also sits on the world's second biggest reserves of gas.

"SPECIAL MECHANISMS"

Western analysts said that though they might appear weak, the latest U.N. measures sent a message to Tehran that even large trading partners like Russia and China opposed Tehran's determination to defy the Security Council.