Our comprehensive assessment of Iraq's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Iraq, as well as the latest industry developments that could impact Iraq's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Iraq before your competitors.

Country Risk

Iraq Country Risk

BMI View:

Core Views

  • Risks of a return to full-blown civil war are elevated following the takeover of jihadist group Islamic state (IS) of the country's north and west.

  • Robust headline growth of the Iraqi economy in 2015 will result from accelerating oil exports. Conversely, domestic expansion will be sluggish and uneven; consumer spending and capital formation will be hit hard by political instability, and declining oil prices will hinder the government's ability to prop up spending.

Major Forecast Changes

  • Iraq's current account surplus will narrow significantly in 2015 as declining oil prices will hit the value of hydrocarbons exports. We forecast Iraq's current account to come in a deficit of 6.8% of GDP in 2015, from our previous forecast of a surplus of 4....

To read the full article Register for Free or Login

Iraq Operational Risk Coverage (9)

Iraq Operational Risk

BMI View:

BMI View: The prevailing instability and turbulence in Iraq greatly detracts from the attractiveness of the country's natural wealth when considering investment and commercial operations. While the threat of terrorism or crime is the major risk in the country, official corruption and bureaucratic inefficiency also pervade most areas of Iraqi society increasing the risks of unforeseeable delays and costs. The outlook for economic growth is mildly positive, but until the security situation can be brought under control or heavily mitigated, Iraq is likely to remain an unattractive option for external investment or commercial interest.

Iraq boasts a reasonably large proportion of the world's natural resources, such as oil, gas and precious metals. This, combined with the Iraqi government...

To read the full article Register for Free or Login

Iraq Crime & Security

BMI View:

Iraq is one of the most unsafe locations in the world for foreign businesses and workers. An extremely strong threat of terrorist activity, crime, and violence pervades Iraqi society, and there is also an inefficacy and ineptitude on behalf of the Iraqi security forces to combat such threats and provide security to Iraqi civilians and foreign nationals travelling in Iraq. In the BMI Crime and Security Risk Index, Iraq has the third lowest score in the MENA region, and the fourth lowest globally, at 6.6 out of 100, placing it among the most dangerous countries in the world including Sudan, Afghanistan, and Syria.

By far the biggest security risk affecting Iraq is the threat of terrorism. The resurgent terrorist groups that have been resourced and fuelled by the Syrian civil war have motivated themselves to vastly increase the number of violent attacks they carry out in Iraq over the past 18 months. This has culminated...

To read the full article Register for Free or Login

Iraq Labour Market

BMI View:

BMI View: The US-led invasion of Iraq in 2003 has caused a cascade of problems which have decimated the country's labour market. The education system suffered severe infrastructural damage, while many teachers and academics were killed or forced to flee. Consequently, both access to schools and the quality of education is poor, lowering the overall skill level of the labour force. A lack of job creation has also resulted in high unemployment, while preventable diseases and unexpected injuries are highly likely to affect the workforce. Iraq is therefore ranked 13 thout of 18 states in the MENA region in BMI's Labour Market Risk Index, with a score of 44.9 out of 100. The country's main mitigating factors are its large...

To read the full article Register for Free or Login

Iraq Logistics

BMI View:

Iraq is affected by several logistics risks, not least the unreliability of its electricity supply, the inadequacy of transport infrastructure, and the prohibitive cost of international trade. All of these factors increase the risk for investors and businesses looking to enter the Iraqi market. These risks are mitigated somewhat by the size of the Iraqi market, as it is forecast to grow strongly in its reconstructive phase following the 2003 incursion. Overall Iraq scores 41.8 out of 100 in BMI's Logistics Risks Index, placing it in 15th position regionally out of 19 countries. That it is sitting marginally above poverty-stricken Algeria and Yemen, and conflict-wracked Libya and Syria, is representative of the severity of the operational risks posed by Iraq's limited transport and utilities infrastructure and complex and costly trade bureaucracy.

The quality and extent of Iraq's transport infrastructure is erratic. The...

To read the full article Register for Free or Login

Iraq Trade & Investment

BMI View:

Iraq represents huge potential for trade and investment. It is currently generating up to IRD10bn a month from oil exports, a figure which could easily treble by the end of the decade. Further massive revenues are expected from Iraq's infant gas industry, which will recover IRD10 million of gas per day once the planned capture programme comes on stream in 2014. On top of this, Iraq has not even started to mine the rich mineral wealth beneath its deserts and mountains, including gold and platinum. Simply put, Iraq is potentially one of the world's wealthiest nations and already has one of the fastest growing economies. However, at present Iraq is one of the regional underperformers for Trade and Investment Risks, due to the lack of rule of law and weak financial sector. Its score of 31.2 out of 100 places it in 5 th lowest position out of 18 countries in the region, slightly ahead of neighbours Iran and Syria. However, Iraq could still be seriously...

To read the full article Register for Free or Login

Iraq Industry Coverage (9)

Autos

Iraq Autos

Defence & Security

Iraq Defence & Security

BMI View:

BMI expects the Iraqi defence budget to be worth USD25.7bn in 2015, which is a significant increase on the USD22.2bn expected by the end of 2014. Despite a slight improvement in the domestic situation on the previous quarter, as a result of international support to shore up the government and the security forces, BMI expects Iraq to be plagued with governance and security difficulties for the foreseeable future.

We have given Iraq an overall security risk rating of 27 for Q115. To us, it seems evident that Iraq's greatest security risk is terrorism, both domestic and international, leaving it with a score of mere 16 out of 100 for Q115. That said, we think that the country is also affected by wider interstate tensions occurring across the Middle East and that its weak governance and security architecture leaves the domestic scene vulnerable to the power play politics of external actors, Notably...

To read the full article Register for Free or Login

Infrastructure

Iraq Infrastructure

BMI View:

BMI View : Iraq's construction sector faces an uncertain outlook. On the one hand, the deteriorating security situation following the rise of Islamic State across parts of the country has severely undermined investor confidence and diverted considerable government resources away from infrastructure investment, reducing public expenditure on vital transport and utilities projects. On the other hand, the country remains an attractive investment destination due to its considerable oil reserves and the project pipeline remains substantial. Falling global oil prices will likely affect government spending in the short to medium term, however over the longer term we expect to see a return to growth in the country's construction sector.

Key Developments:

  • Following the release of official national construction sector...

To read the full article Register for Free or Login

Medical Devices

Iraq Medical Devices

BMI View:

BMI Industry View: The medical device market is expected to experience moderate growth over the forecast period, led by growth of consumables, dental products and patient aids. As there is very little domestic production, the market is heavily reliant on imports, which have experienced strong growth in recent years, while the level of exports is very low. A lack of healthcare facilities, the instability of the political environment and declining oil prices are likely to affect the competitiveness of the medical device market.

Headline Industry Forecasts

  • ...

To read the full article Register for Free or Login

Mining

Iraq Mining

Oil & Gas

Iraq Oil & Gas

Pharmaceuticals & Healthcare

Iraq Pharmaceuticals & Healthcare

BMI View:

BMI View: The competitiveness of Iraq's pharmaceutical sector, as well as the ability of the government to ramp up healthcare investment, is linked to oil prices and additional foreign investment, which is, in turn, highly dependent on the security situation. The long-term prospects for the Iraqi pharmaceutical and healthcare markets therefore remain promising given rising healthcare expenditure and population growth. The Iraqi government reportedly pledged to invest USD12bn into healthcare expansion in 2014, and the Ministry of Health recently awarded 18 health project contracts worth USD276mn. In the short term however, numerous factors will continue to hamper market growth, such as...

To read the full article Register for Free or Login

Telecommunications

Iraq Telecommunications

BMI View:

BMI View: Iraq's telecoms market offers a mix of great opportunity and heavy risks. The country's large population and a penetration rate still below 100% underpin our generally positive growth outlook for the country's telecoms sector between 2014 and 2018. Moreover, a final agreement between operators and the government on 3G spectrum and subsequent launch of 3G services at the very end of 2014 creates massive opportunities in Iraq's wildly underserved data market. However the deteriorated security situation has begun to take its toll on the sector, with network outages resulting in sharp mobile subscriptions losses in Q314 and ARPUs continuing to fall. BMI's Country Risk team expects ISIS to remain a resilient fighting force over the coming years, which will weigh on private consumption levels in the country, and keep operating costs and the cost of reaching national 3G coverage high for operators.

...

To read the full article Register for Free or Login

Water

Iraq Water

BMI View:

BMI View: We have substantially expanded our forecasts this quarter, and now cover water extraction by source, including desalination, household water consumption, households connected to mains networks, and water losses. We expect the majority of our forecasted indicators to see a substantial decline over 2015 in the wake of IS' continued targeting or water facilities, and do not anticipate a full recovery until the end of our forecast period. However, should the conflict continue or intensify, with IS destroying facilities as opposed to capturing them, then this poses a significant downside risk to our forecasts. Should the conflict continue beyond the end of 2015, this will represent a further downside risk.

ISIS now controls or has a presence near a number of key river dam water supply facilities across Iraq, particularly those on the major Tigris and Euphrates rivers, which represent Iraq's key freshwater...

To read the full article Register for Free or Login