Iran Country Report - June, 2018

  • ID: 4557845
  • Country Profile
  • Region: Iran
  • 41 Pages
  • Emerging Markets Direct
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Iran’s real GDP growth is forecast to edge down to 4.0% in both 2018 and 2019 after coming in at 4.3% in 2017, according to the latest edition of the World Economic Outlook issued by the International Monetary Fund (IMF) on April 17. IMF noted that higher investment growth will be offset by lower oil production growth and limited access to finance.

Nonetheless, this figure is a shortfall from the impressive 12.5% economic growth recorded in the last Persian year ended March 20 since international sanctions were lifted in January 2016. Besides the effect of a slowdown in its oil sector following an exceptionally high 2016 surge, activity in Iran was dampened by weak foreign investor confidence associated with geopolitical tensions (including new sanctions and a hardened nuclear-deal stance by the United States).

The Trump administration on May 8 unilaterally walked out of the multilateral Iran nuclear deal and warned foreign companies that chose to remain involved with the Islamic Republic that they would be exposed to Washington’s reintroduction of heavy sanctions against Tehran. Whatever the rights and wrongs of the move it leaves Washington and the five other signatories who in late 2015 agreed to the deal with Iran-the UK, France, Germany, Russia and China-on a collision course with the Trump administration. And, just for starters, Iran’s plans to source $200bn of investment for its oil, gas and petrochemical industries and spend $38bn on Boeing and Airbus aircraft purchases may be doomed.

As the accord entirely unravels, Iran's hopes for economic expansion in the years ahead would take a much greater hit through impacts on trade, investment and available financing. A Swiss bank on May 29 suspended new transactions with Iran and said it was winding down Iran-related activities while two Indian banks reportedly asked exporters to complete their financial transactions with Iran by August. Several sizeable European companies such as Poland’s PGNiG, Germany’s Wintershall and French energy major Total look set to avoid irking Washington. They seem unlikely at this point to keep their current business ties with Iran.

Iran retains firm hopes that at least China and India-the two biggest markets for its vital oil exports-will pay little heed to the US sanctions while the European Union and Russia are working out what practical protection they can offer their firms from secondary sanctions stemming from the American action against Iran.

Meanwhile, the euro has been confirmed as the preferential currency for trade between Iran and the EU after the IRR plummeted to a record low of 70,000 to the dollar on the free market in the build-up to the US withdrawal from Iran nuclear deal.

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1.0 Executive summary

2.0 Politics
2.1 US, Europe on collision course as Trump ‘hard exists’ from Iran nuclear deal
2.2 India boosts Iran saying it will only abide by UN sanctions
2.3 Iranian parliamentary commission agrees anti-terrorism banking rules but with caveats
2.4 Caspian Sea states agree several documents, Iran says
2.5 Rouhani determine that Guard will not obtain markets left by sanctions-hit foreign investors
2.6 US sanctions Iran’s central bank governor as "specially designated global terrorist"
2.7 Tehran votes in new reformist mayor after predecessor’s downfall in spat

3.0 Macro Economy
3.1 Macroeconomic overview, outlook

4.0 Real Economy
4.1 Industrial production
4.2 Inflation
4.2.1 CPI dynamics
4.2.2 PPI dynamics
4.3 Labour and income
4.3.1 Labour market, unemployment dynamics

5.0 External Sector & Trade
5.1 Balance of payments and current account
5.1.1 current account dynamics
5.1.2 Import/export dynamics
5.1.3 Gross international reserves
5.2 FTAs
5.3 FDI

6.0 Public Sector
6.1 Budget
6.1.1 Budget dynamics - tax issues
6.1.2 Budget dynamics - funding, privatisation
6.2 Debt

7.0 FX
7.1 Cryptocurrency

8.0 Financial & capital markets
8.1 Bank sector overview
8.1.1 Liquidity
8.1.2 Foreign assets
8.1.3 Loans
8.1.4 Deposits
8.1.5 NPLs
8.1.6 Banks specific issues
8.1.7 Bank news
8.2 Central Bank policy
8.3 Stock market
8.4 Fixed income
8.4.1 Fixed income - bond news

9.0 Industry & Sectors
9.1 Sector news
9.1.1 Oil & gas sector news
9.1.2 Automotive sector news
9.1.3 Transport sector news
9.1.4 TMT sector news
9.1.5 Agriculture sector news
9.1.6 Property sector news
9.1.7 Tourism sector news
9.1.8 Metallurgy & mining sector news
9.1.9 Renewable energy sector news
9.2 Major corporate news
9.2.1 Oil & gas corporate news
9.2.2 Automotive corporate news
9.2.3 Transport corporate news
9.2.4 TMT corporate news
9.2.5 Tourism corporate news
9.2.6 Retail corporate news
9.2.7 Renewable energy corporate news

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