2013-09-18 08:52:49 - Fast Market Research recommends "Iraq Business Forecast Report Q4 2013" from Business Monitor International, now available
Despite the formation of a government in December 2010, we expect political progress to remain slow and stability fragile. A broken power-sharing agreement and persistent sectarian tensions present key risks.
The Iraqi economy will be among the fastest growing in the world over the coming five years, driven by an aggressive increase in oil production and the start of large-scale infrastructure projects.
Major Forecast Changes
We have revised down our forecasts for real GDP growth, and project the economy to expand 10.5% and 10.7% in 2013 and 2014, respectively, compared to our previous forecast of 11.2% in 2013 and 14.5% in 2014. This largely result from BMI's Oil & Gas research team's more conservative outlook on oil exports, resulting from persisting security
risks and an outdated infrastructure, coupled with low exports from the semi-autonomous Kurdistan region. With political instability increasing, risks to the economic outlook remain to the downside
Full Report Details at
- www.fastmr.com/prod/673194_iraq_business_forecast_report_q4_2013 ..
Key Risk To Outlook
Attacks on oil infrastructure due to terrorism or acts of political protest present downside risks to our growth forecasts.
A breakdown of the coalition government could lead to a period of pronounced instability and slower growth.
Report Table of Contents:
Major Forecast Changes
Key Risk To Outlook
Chapter 1: Political Outlook
BMI Political Risk Ratings
Risks To Stability Remaining Elevated
- Despite tentative improvements in relations between Baghdad and Erbil, the political situation in Iraq continues to deteriorate. We reaffirm our view that the country's political blocs will reach some form of agreement which will avoid the descent into outright civil war. Under a scenario whereby political risks continue to increase, however, prospects of an eventual partition of the country should not be underestimated.
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Multiple Challenges To Stability Over The Coming Decade
- Iraq faces multiple challenges to its stability over the coming decade, and we do not preclude a return to authoritarian rule, renewed sectarian conflict or the break-up of the state. The key to maintaining stability is ensuring that Iraq's separate ethnic groups' interests are protected by the federal government. Even if Iraq avoids these negative scenarios, the country is likely to remain politically fragmented for the foreseeable future, although this would not necessarily preclude an economic revival.
Chapter 2: Economic Outlook
BMI Economic Risk Ratings
Expanding Steadily Despite Downward Revision
- We project real GDP growth in Iraq of 10.5% and 10.7% in 2013 and 2014, respectively, down from our previous forecast of 11.2% in 2013 and 14.5% in 2014, due to lower projected oil export growth over the next quarters. That said, we reaffirm our constructive view on the country's medium-term economic outlook, and project Iraq to remain the fastest growing economy in the MENA region over the coming years.
TABLE: ECONOMIC ACTIVITY
Balance Of Payments
Investment To Grow Below Potential In 2013
- We project Iraq's current account to come in surplus to the tune of 7.8% and 6.3% of GDP in 2013 and 2014, respectively. Although foreign investment will remain significant, elevated risks will ensure that FDI inflows stay below potential in virtually every sector. The semi-autonomous Kurdistan region will remain a bright spot, particularly for the oil and construction industries.
TABLE: CURRENT ACCOUNT
Inflation Remaining Low In H213
- Consumer price inflation (CPI) in Iraq increased 1.1% in May, a 0.8% decline in month-on-month terms. Although we expect the ongoing decline in prices to slow over the coming quarters, CPI will remain below 2012-levels this year. We forecast the headline print increasing by an average 4.0% and 5.5% in 2013 and 2014, compared to average growth of 6.2% in 2012.
TABLE: MONETARY POLICY
Chapter 3: 10-Year Forecast
The Iraqi Economy To 2022
Continued Growth Dependent On Maintaining Stability
- Our 10-year macroeconomic forecasts are based on the expectation that Iraq will become an increasingly stable polity, setting the foundation for average real GDP growth of 7.9% between 2013 and 2022. The oil and gas sector will continue to be the lifeblood of the economy over this time frame.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 4: Business Environment
BMI Business Environment Risk
Chapter 5: BMI Global Assumptions
Risks Mounting For Emerging Markets
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.