Country Risk Service Iran Updater
The Economist Intelligence Unit, March 2013, Pages: 21
The policies of Iran's president, Mahmoud Ahmadinejad, will be blocked by an antagonistic parliament in the final months of his mandate. The presidential election in June 2013 is likely to be far more heavily stage-managed than the previous one in 2009, with an establishment figure close to the supreme leader, Ayatollah Khamenei, likely to take the post. Iran's relations with the West will remain tense following Iranian threats to close the Strait of Hormuz and continued enrichment of uranium, which the US and its allies suspect is meant for the production of nuclear weapons. The US and the EU will maintain sanctions on the Islamic Republic. Negotiations over its nuclear programme will continue intermittently, but these are unlikely to result in a grand bargain, as neither the US nor Iran will be prepared to offer concessions unilaterally. The Economist Intelligence Unit expects this pattern of alternating escalations in tensions and returns to negotiation to continue. The economy will shrink on average in 2013­14 as Iran is restricted in its ability to export crude and the rial weakens. The current and fiscal accounts will also struggle as the country feels the impact of ongoing international sanctions.
Talks between the P5+1 (the five permanent members of the UN Security Council and Germany) were described as positive, but any agreement over Iran's nuclear programme remains elusive.
Mr Ahmadinejad has proposed the 2013/14 budget, in which non-oil revenue is set to increase. We believe in Iran's current economic situation, this will be unlikely.
Country Risk Service Iran Updater
Iran at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2013-17: Political stability
Central scenario for 2013-17: Election watch
Central scenario for 2013-17: International relations
Central scenario for 2013-17: Policy trends
Central scenario for 2013-17: Fiscal policy
Central scenario for 2013-17: Monetary policy
Central scenario for 2013-17: Economic growth
Central scenario for 2013-17: Inflation
Central scenario for 2013-17: Exchange rates
Central scenario for 2013-17: External sector
Key risk indicators
Ratings summary
Quarterly indicators
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Financial sector
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
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