Report: Country Report Iran June 2008 (EIU00153) from ReportBuyer.com

The president, Mahmoud Ahmadinejad, will continue to enjoy the support of the supreme leader, Ayatollah Ali Khamenei. Criticism over his handling of the economy, however, may damage his re-election prospects in 2009.
The Economist Intelligence Unit believes that the threat of a US military attack against Iran has declined significantly, although economic sanctions are likely to intensify in response to the Islamic Republic's ongoing nuclear programme.
The hydrocarbons industry, which provides over 80% of government revenue, will continue to face investment difficulties as foreign companies come under increasing pressure to cut ties with Iran because of its nuclear activities.
Nevertheless, Iran is expected to raise its oil and gas output over the outlook period, boosting GDP growth. We forecast that real GDP will expand by 6.5% in fiscal year 2008/09 (March 21st-March 20th) and by 6% in 2009/10.
Further strong increases in food and housing costs, which pushed up consumer prices by an average of 17.1% in 2007, will continue to persist. As a result, we forecast that inflation will average 28% in 2008 and 25% in 2009.
High international oil prices and moderate import growth will ensure that Iran continues to record healthy current-account surpluses, which are forecast to average 12.5% of GDP a year in 2008-09.

The election of Ali Larijani as Majlis (parliament) speaker in late-May suggests a shift in the balance of political power away from the president.
The Iraqi prime minister has visited Iran to reassure the Iranian leadership that Iraq will not allow itself to be used as a launch-pad for a US attack against its neighbour. He also called for Iran's help in moderating Shia militias in Iraq.
Israel and the US have ratcheted up pressure on Iran over its nuclear programme. Iran, however, has continued to insist that it will not suspend its uranium enrichment activities as demanded by the UN Security Council.
The US and the EU have threatened to tighten sanctions on Iran, in particular against its banking sector.
The latest data from Bank Markazi (the central bank) show that year-on-year inflation had edged up to 25.3% by May 20th.
The government has adopted new petrol quotas for owners of new cars, exactly one year after introducing a nationwide rationing scheme.
The Indian external affairs minister has confirmed a visit to Iran scheduled for next month, during which he will discuss progress on the proposed gas "peace pipeline" between the Islamic Republic, India and Pakistan.

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