IRAN

Country risk rating

D4

HIGH RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD454bn (World ranking 27, World Bank 2018)
Population 82mn (World ranking 19, World Bank 2018)
Form of state Theocratic Republic
Head of government Hassan ROHANI (President)
Next elections 2020, legislative
  • World’s second largest known natural gas reserves and fourth largest oil reserves, which will last over 100 years at current rates of extraction (according to the government)
  • Large domestic market
  • Large FX reserves, currently providing 9 months import cover.
  • Very low external debt obligations
  • Occasional conflict between the twin pillars of power – the government and the theocracy.
  • Imposition of sharp sanctions and secondary sanctions by the U.S. after Iran withdrew from the Joint Comprehensive Plan of Action (JCPOA), known commonly as the Iran nuclear deal. This has raised the already high level of geopolitical risk for the region (e.g. a more radical stance of Iran on Israel and Saudi Arabia)
  • Regional dynamics are negative. Neighbors include Iraq, Afghanistan and Pakistan. The Syrian conflict and IS activities provide further uncertainties. Moreover, Israel is perceived as a security threat
  • Risk of domestic social unrest and a harsh response by the authorities
  • Very high exchange rate vulnerability. Black market rate is about 3-4 times above official rate
  • High double-digit inflation

Trade structure by destination/origin

(% of total)

Exports Rank Imports
China 32%
1
34% United Arab Emirates
India 13%
2
19% China
Turkey 12%
3
7% Turkey
Japan 8%
4
6% Korea, Republic of
China, Taiwan Province of 8%
5
5% Germany

Trade structure by product

(% of total)

Exports Rank Imports
Petroleum, petroleum products and related materials 60%
1
12% Iron and steel
Organic chemicals 5%
2
8% Road vehicles
Plastics in primary forms 4%
3
7% Other industrial machinery and parts
Gas, natural and manufactured 4%
4
5% Electrical machinery, apparatus and appliances, n.e.s.
Vegetables and fruits 3%
5
5% Specialised machinery

Contact

Euler Hermes

Economic Research Team

research@eulerhermes.com

Manfred Stamer

Senior Economist for Emerging Europe and the Middle East

manfred.stamer@eulerhermes.com

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