Business Monitor International


Iran Business Forecast Report

Published 22 July 2014

  • 49 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Iran Business Forecast Report

Core Views

  • Recent improvements in relations with the West bode well for the country's economy. That said, uncertainty over the outcome of negotiations over Iran's nuclear programme will ensure that risks to the outlook remain elevated.

  • The economy is set to return to growth in 2014, as i mproving relations with the West and better macroeconomic management, coupled with low base effects, will lead to an improved outlook for exports and increased business and consumer confidence.

  • Despite some improvements, the Iranian rial will remain sensitive to developments in nuclear negotiations over the coming quarters.

Major Forecast Changes

  • We have revised our real GDP growth forecasts this quarter, and are projecting the economy to expand by 3.2% in real terms in 2014, up from our previous forecast of 2.8% growth.

Key Risks To Outlook

  • A breakdown in negotiations over the country's nuclear programme could prompt us to revise our real GDP growth forecasts downward and our inflation forecasts upward.

  • Higher global energy prices may lead to upside risk to our growth forecasts and downside risk to our fiscal deficit forecasts.

Macroeconomic Forecasts (Iran 2012-2015)
Indicator 2012e 2013e 2014f 2015f
Nominal GDP, USDbn 550.6 481.6 448.0 517.4
Real GDP growth, % y-o-y -1.9 -2.9 3.2 2.7
Consumer price inflation, % y-o-y, eop 41.2 19.7 25.0 19.0
Exchange rate IRR/USD, eop 12,274.95 24,653.00 24,700.00 25,000.00
Budget balance, % of GDP -0.7 -2.5 -1.1 -0.9
Current account balance, % of GDP 4.8 5.1 4.9 3.7
National Sources/BMI

Click here to explore data

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Nuclear Talks: Regional Implications
8
TABLE: Political Overview
8
TABLE: Possible Scenarios As Diplomacy Advances
9
TABLE: Syria - Long-Term Scenarios
9
Long-Term Political Outlook
12
Regime Change Likely By The Next Decade
12
Chapter 2: Economic Outlook
17
SWOT Analysis
17
BMI Economic Risk Ratings
17
Economic Activity
18
Modest Expansion In 2014 And 2015
18
TABLE: Possible Scenarios As Diplomacy Advances
18
TABLE: Economic Activity
19
Monetary Policy
20
Inflationary Environment Improving In 2014 And 2015
20
TABLE: Monetary Policy
21
Banking Sector I
22
Reform Only In The Medium Term
22
Banking Sector II
23
Negative Real Interest Rates Affecting Stability
23
Chapter 3: 10-Year Forecast
25
The Iranian Economy To 2023
25
Significant Challenges Ahead
25
TABLE: Long-Term Macroeconomic Forecasts
25
Chapter 4: Business Environment
27
SWOT Analysis
27
BMI Business Environment Risk Ratings
27
Business Environment Outlook
28
Institutions
28
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
28
Infrastructure
29
TABLE: BMI LEGAL FRAMEWORK RATING
29
TABLE: LABOUR FORCE QUALITY
30
TABLE: MENA - ANNUAL FDI INFLOWS
31
Market Orientation
32
TABLE: TRADE AND INVESTMENT RATINGS
32
Operational Risk
33
Chapter 5: Key Sectors
35
Pharmaceuticals & Healthcare
35
TABLE: Phar maceutical Sales , Hist orical Data And Forecasts
36
TABLE: Healthcare Expe nditure Tre nds , Hist orical Data And Forecasts
38
TABLE: Gover nment Healthcare Expe nditure Tre nds , Hist orical Data And Forecasts
38
TABLE: Pri vate Healthcare Expe nditure Tre nds , Hist orical Data And Forecasts
38
Telecommunications
40
TABLE: Telec oms Sect or - Mobile - Hist orical Data & Forecasts
40
TABLE: Telec oms Sect or - Wireli ne - Hist orical Data & Forecasts
42
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Global Recovery Still On Track
43
Table: Global Assumptions
43
Table : Devel oped States , Real GDP Growt H, %
44
Table : BMI VERSUS BLOOM BERG CON SENSUS REAL GDP GROWTH FORECASTS, %
44
Table : Emergi ng Mar kets , Real GDP Growth , %
45

The Iran Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Iran and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Iran's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Iran's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Iran's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Iran, including currency volatility, the commodity price boom and protectionist policies.

The Iran Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Iran economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Iran through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Iran Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Iran and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Iran, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Iran over the next 5-years?

BMI's Iran country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Iran Market - Political Strengths, Weaknesses, Opportunities and Threats facing Iran.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Iran's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Iran's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Iran, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Iran's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Iran will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Iran's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express