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Iran Country Risk Report Q4 2018

Iran Country Risk Report Q4 2018

The re-imposition of US sanctions will substantially weaken Iran's economy and further fuel popular discontent inside the Islamic Republic. That said, with long-standing partners such as China and Russia still maintaining engagement, a severe multi-year depression or resultant political destabilisation appear unlikely to occur – at least over the next few years.

Outbursts of unrest across the country are likely to persist in the weeks and months ahead as protesters' grievances remain unanswered.

The Iranian rial will remain subject to depreciatory pressures over the months ahead, as re-imposed US nuclear-related sanctions reduce the availability of hard currency. A multi-tiered exchange rate system will emerge to ensure basic goods are available at reasonable prices, albeit at an elevated cost for the broader economy, as opportunities for arbitrage flourish and the private sector's access to materials and financing becomes increasingly constrained.

Key Risks

Drastically tighter international compliance with re-imposed US nuclear-related sanctions on Iran would exacerbate already-dire economic conditions inside the country. In turn, risks of internal political destabilisation would rise.

Should Tehran decide to aggressively pursue a nuclear weapon, or take steps perceived as credible threats to Middle Eastern stability, a US/Israeli military attack on Iranian territory could be possible.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
US Sanctions Re-Imposed: Scenarios & Implications For The Iranian Economy
TABLE: TIMELINE FOR RE-IMPOSITION OF NUCLEAR DEAL-RELATED US SANCTIONS ON IRAN
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Currency Forecast
IRR: Multi-Tiered Exchange Rate System To Re-Emerge
TABLE: FITCH SOLUTIONS CURRENCY FORECAST
10-Year Forecast
The Iranian Economy To 2027
Potential For Regional Outperformance, Though Instability Risks To Persist
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Unrest Highlights Iran's Rising Economic Woes
TABLE: POLITICAL OVERVIEW
Iran Country Risk Q4 2018ContentsLong-Term Political Outlook
Hard Liners To Maintain Control, But Power Struggle Likely
Global Macro Outlook
Pressure On EM Grows, As Do Divergences
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: IRAN – MACROECONOMIC DATA & FORECASTS

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