Hopes of a return to stable government have risen after the return of veteran politician Adel Abdul Mahdi as the country’s prime minister. Economic growth is still at risk while Iraq is a di cult place to do business in.
• Economic risk (HIGH): The outlook for the economy is for stronger growth as the non-hydrocarbon economy adds to an oil sector bene tting from higher prices.
• Political risk (HIGH): The appointment of Abdul Mahdi has removed some of the uncertainty that arose after Moqtada al-Sadr looked poised to take over the reins. Long term doubts remain over relations with the US and Iran.
• Financial risk (HIGH): The government’s scal and external balances are vulnerable to continued low oil prices. There is a risk of bank bailouts endangering sovereign solvency.
• Commercial risk (HIGH): Opaque and sti ing bureaucracy makes Iraq one of the world’s hardest places to do business. The central bank has o ered $5bn of SME credit lines.