Iran - Country Report - September 2018

  • ID: 4619815
  • Country Profile
  • Region: Iran
  • 50 Pages
  • Emerging Markets Direct
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Iran’s Economy Expanded by 3.7% During The 2017-2018 Persian Calendar Year (Ended March 20), According to a Report Released by The Central Bank of Iran on June 16.

Iran’s economy expanded by 3.7% during the 2017-2018 Persian calendar year (ended March 20), according to a report released by the Central Bank of Iran (CBI) on June 16. Further revisions of expected GDP growth in Iran, a country with a population of 80m, can be expected as the impact of the sanctions, and the secondary sanctions directed at foreign companies who opt to continue doing business with Iran, becomes clear. The US is intent on throttling Iran’s economy to achieve its ends.

Since Donald Trump unilaterally withdrew the US from the multilateral pact in early May, Iran and the other signatories (the UK, France, Germany, Russia and China), have set out to salvage it. The efforts of London, Paris and Berlin have, in particular, underwhelmed the Iranians who on November 5 will face a second salvo of heavy sanctions from Washington. Crucially, those sanctions will target Iran’s lifeline oil exports.

The first set of US sanctions, which were introduced in early August, target Iran's auto industry, trade in gold and other precious metals, issuance of sovereign debt, purchases of US dollars and other global trade. The second set of sanctions will be aimed at Iran's banking sector and oil industry, with Washington demanding that all countries stop importing Iranian crude oil. Oil export revenues are indispensable to Iran’s economy and Tehran has threatened to block the Strait of Hormuz in response to Trump’s move against its oil sales.

Iran’s Supreme Leader Ayatollah Ali Khamenei has called on the Iranian government to work "day and night" to resolve the country's growing economic difficulties. Rouhani on August 28 answered a summon from parliament to explain shortcomings blamed on him and his ministers.

The Iranian rial has lost more than half its value against the dollar in recent months, some external reports claim inflation has risen past 200% and many big foreign companies that were present in Iran, including European enterprises, have made for the exit. Most would have been clearly exposed to US secondary sanctions if they had stayed given connections to US financial markets, including capital raising activities, and assets. For instance, the latest big names to state that they are suspending operations in Iran include French energy major Total, German auto giant Daimler, British Airways and Air France. The Trump administration claims that more than 50 foreign companies have withdrawn from Iran since the sanctions were announced.

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. Though the other major power signatories to the deal still back the nuclear accord, noting that Iran has always remained in full compliance with it, they have so far done little to shield their companies from the penalties. Iran, of course, will have little incentive to stay in the nuclear deal if the EU does not deliver it the economic incentives to do so.

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1.0 Executive summary

2.0 Politics

2.1 Iran could abandon nuclear deal warns Khamenei
2.2 Rouhani appears in Iranian parliament to explain government shortcomings in addressing economic turmoil
2.3 US Navy warned to steer clear of Strait of Hormuz naval commander
2.4 French, German ministers discussing financing solutions to sidestep US’s Iran and other sanctions
2.5 Russian, Turkish and Iranian presidents to attend Iran summit over fate of last opposition holdout in Syria 
2.6 Analysts look at Iran’s Zaghari-Ratcliffe release for what it says about efforts to save nuclear deal
2.7 Iran sets up new courts to deal with profiteers exploiting consequences of economic war with US

3.0 Macro Economics

3.1 Macroeconomic overview
3.2 Macro outlook

4. 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 and 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

7.0 FX

    7.1 Cryptocurrency

8.0 Financial & Capital Markets

8.1 Bank sector overview
    8.1.1 Liquidity
    8.1.2 Foreing assets
    8.1.3 Loans
    8.1.4 Deposits
    8.1.5 NPLs
    8.1.6 Bank specific issues
    8.1.7 Bank news
8.2 Central Bank policy
8.3 Stock market
8.4 International ratings
8.5 Fixed income
    8.5.1 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 Retail sector news
    9.1.7 Fast moving consumer goods sector news
    9.1.8 Property sector news
    9.1.9 Tourism sector news
    9.1.10 Metallurgy & mining sector news
    9.1.11 Renewable energy sector news
    9.1.12 Defence 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 Metallurgy & mining corporate news
    9.2.6 Renewable energy corporate news

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