Iraq Business Forecast Report Q1 2013: New Research Report Available At Fast Market Research

New Country Reports market report from Business Monitor International: "Iraq Business Forecast Report Q1 2013"

by Bill Thompson

(WireNews+Co) - Boston, MA - 07 January 2013

Core Views

Despite the formation of a government in December 2010, we expect political progress to remain slow and stability to remain fragile. A broken power-sharing agreement, withdrawal of US troops, and persistent sectarian tensions all present 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 9.4% and 10.3% in 2012 and 2013, respectively, compared with our previous forecasts of 10.5% in 2012 and 13.8% in 2013. That said, we reaffirm our bullish outlook on the country's medium-term trajectory.

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Key Risks 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.

Partial Table of Contents:

Executive Summary

Core Views

Major Forecast Changes

Key Risks To Outlook

Chapter 1: Political Outlook

SWOT Analysis

BMI Political Risk Ratings

Domestic Politics

Russia Arms Deal Increasing Instability

- Iraq's US$4.2bn arms deal with Russia signals Baghdad's desire to reduce its dependency on the US as its main security partner. In addition, the move will eighten domestic political tensions, as Kurdish politicians fear that the weapons could be used against the KRG.

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

SWOT Analysis

BMI Economic Risk Ratings

Economic Activity

Lower Oil Production Slowing Growth

- We forecast Iraq's economy to grow 9.4% and 10.3% in real terms in 2012 and 2013, respectively. The economic expansion will be slower compared to our previous forecasts of real growth of 10.5% in 2012 and 13.8% in 2013, as oil exports will increase less rapidly than expected. That said, given high projected government spending and the country's buoyant hydrocarbon wealth, we maintain our bullish medium-term view on the economy.

TABLE: ECONOMIC ACTIVITY

Monetary Policy

Inflation Increasing Heading Into 2013

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