Report: Poor Business and Operational Environment to continue to deter Iraq Infrastructure Private Investment
Fast Market Research announces the availability of a new Business Monitor International report, "Iraq Infrastructure Report Q4 2015" on their comprehensive research portal.
The negative view of Iraqi construction and infrastructure that has pervaded our outlook for several quarters has had little reason to change this quarter. While the security situation, particularly in the Islamic State (IS)-held north of the country, worsens, the government's ability to finance infrastructure will remain limited and private investment will be deterred. On a positive note, the World Bank has agreed a USD350mn loan to help rebuild infrastructure in war-damaged regions. In the investment bright spot of Kurdistan , the regional government has passed a law allowing the region to tap international capital markets for USD5bn towards infrastructure development.
Iraq's construction industry is being severely affected by the poor security situation, with the IS insurgency even affecting business sentiment in the Kurdish region, the once-considered relatively safe haven and primary investment destination. After failing to agree on a budget for 2014, the new parliament has approved one for 2015. However, it has been greatly limited by the falling oil price and the diversion of funds to security, meaning in the short term that infrastructure development will not likely receive the full state backing it requires. Meanwhile, the poor business and operational environment will continue to deter private investment from a country with a large reconstruction-related project pipeline. The potential in Iraq is great, as too is the risk, and we do not foresee stability until at least the medium term.
Get More Details on this Report and a Full Table of Contents at Iraq Infrastructure Report Q4 2015
In the previous quarter we had expected growth in 2014 to contract by 6% in 2014, but after the release of official data, we have significantly downgraded our estimate to -16.2% for the full year. Furthermore, as opposed to seeing 2015 as a return to growth, as we had originally expected, we now see a decline of -7.6%. We are forecasting in 2016 a return to growth, with a very base-effected and weaker than originally anticipated 3.8%.
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