Iran Country Risk Rating

The Islamic Republic of Iran maintains its very-high overall country risk rating, as the stalemate persists over finding a resolution to the ongoing U.S. conflict with Iran. Hardliners have derailed the previous MOU with the U.S. due to concerns that too much control was being given up for the Straits of Hormuz and given the fear of further U.S./Israel attacks. While tactically the hardliners are open to some negotiations this comes with military strength to improve Iran’s negotiating position. A volatile Trump administration can make it difficult to reach a more Iran friendly ceasefire deal and reopening of the Straits of Hormuz, though economic pressure still makes this the most likely outcome. Political interference and legal & regulatory risk had been re-affirmed at a very-high risk rating, as domestic suppression remains significant during the current war phase and after the January 2026 uprising. The political violence rating has therefore also remained high, both due to the war; population suppression and cost of living concerns. The risk of doing business also remains high, while supply chain disruption remains at high. On the economic front, the IMF have signalled yet another contraction for Iran’s GDP growth this year, forecasting -6.1% in 2026 with an expected rebound at 3.2% in 2027. The ongoing conflict has hurt infrastructure, but also curtailed oil exports due to the intermittent U.S. blockade. The non-oil sector is on a similar path due to destroyed infrastructure and weakened investment. Inflationary pressures are set to persist, with the IMF projecting a steep rise to 68.9% in 2026. Sovereign non-payment risk is high rating, as export revenue has been hurt by the war and a current account deficit of 1.8% of GDP is projected for 2026.