Thursday, August 22, 2013

Iran Business Forecast Report Q4 2013

Business Monitor International, the credit risk rating and political risk analysis organization, recently published its “Iran Business Forecast Report Q4 2013.” Following are the highlights of the report distributed by USPRwire:  
“The (Iranian) economy will remain a regional laggard as investment activity stalls following the imposition of a more stringent set of international sanctions on the regime in 2012 and 2013.
The Iranian rial will remain under fundamental downside pressure as households continue to shift their savings into dollars and gold.
We have revised our real GDP growth forecasts this quarter, and are projecting the economy to fall 2.0% in real terms in 2013, up from our previous forecast for a 2.3% contraction.
The victory of moderate Hassad Rouhani in presidential election in June will bolster business confidence, while we expect macroeconomic management to improve.
Growth will return in 2014; however, the economy will continue growing below potential over the coming years. 

Although improved confidence on the country's economic trajectory and more cordial relations with the West will cushion from a dramatic drop in the value of the rial, downside pressure on the unit will remain elevated this year. As a result, inflationary pressure will remain raised over the coming quarters.
Higher global energy prices may lead to upside risk to our growth forecasts and downside risk to our fiscal deficit forecasts.”


Anonymous said...

This analysis is sound. Iran will face more economic pressure this year, however, with the Arab Spring unraveling into an Arab nightmare, the rising price of energy may mitigate some pressure. The new oil minister has alluded to increasing the oil output, but without major foreign investment that may be difficult. It may also help to have a more strategic foreign policy and engage Russia, China and India.

Anonymous said...

"our real GDP growth forecasts this quarter, and are projecting the economy to fall 2.0% in real "

2% is not too bad
I believed the GDP Growth ist 2013 zero ?

Anonymous said...

I would agree that despite massive problems created by the US/Zionist sanctions Iranian economy will not collapse as acknowledged by most knowledgeable analysts. Iran is diversifying from its total dependence on energy resources and is now exporting large amounts of iron ore to China as well.

While Iran's oil exports have halved in the last few years due to US/Zionist sanctions over the country's disputed nuclear program, iron ore exports have grown by more than 60 percent over the same period to an annual rate of about 25 million tonnes, worth about $3 billion a year at current prices.

The extra billion dollars a year that Iran is gaining from the additional iron exports, however, is still very small when compared with the loss in oil revenue of roughly $35 billion a year.

Iran's oil revenue was $69 billion in 2012, according to estimates from the U.S. Energy Information Administration.

It has overtaken India to become the fourth-largest iron ore supplier to China in the last year. Iran's exports to the world's top iron ore consumer rose 35 percent to 13.4 million tonnes in the seven months to July, according to Chinese customs figures.

Chinese buyers of iron ore see Iranian minerals of higher quality and less transportation costs and as a welcome alternative to leading suppliers Australia and Brazil. Chinese have cut back on Australian imports due to higher costs and Australia's subservience to US with the granting of military basis for US forces in Darwin as America "pivots to Asia" and Australia becomes a front-line state against China.

WASHINGTON (AP) -- New signs are emerging that international sanctions are taking a deepening toll on Iran's economy - putting billions of dollars in oil money out of the government's reach. Yet there is no indication the distress is achieving the West's ultimate goal of forcing the Islamic Republic to halt its nuclear program.

Iran has proved adept at working around sanctions and if oil prices don't plummet, U.S. analysts say the country probably has enough economic stamina to reach what the West suspects is its true intention - producing nuclear weapons.

"They can hang on for a long time," said Steve Hanke, a professor of applied economics at Johns Hopkins University who follows Iran's economy. "The sanctions as a deterrent for nuclear ambitions are more or less futile because all the experts will tell you they can (make a weapon) in a couple years."

Sanctions are at the core of international efforts to stop Iran's nuclear program. And if they fail, it will leave the West with some grim options. The U.S. and its allies may have to choose between accepting a nuclear-armed Iran run by hard-line clerics or military action that could fuel more turmoil in the already tumultuous Middle East and still fail to cripple the nuclear facilities.

I personally believe that based on the deadbeat US economy and strategic morass from Syria to Afghanistan, the US will settle for accepting a nuclear Iran without a overt nuclear test. In other words a bomb in the basement option.

Anonymous said...

that's -2%