Economics Coursework

Financial Prospects In Iran
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The Regional Economic Outlook report is a rendition of the financial security of various countries, issued regularly by the International Monetary Fund, to serve as a guide in the formulation of municipal economic policies. In its assessment, this report highlights the salient elements of an economy, its shortcomings, and the rationale behind the said failures. Such was the case in the May 2015 report on the Middle East and Central Asia. Speculatively, the report outlines the place of Middle East’s most lucrative product, oil, and how its fluctuations have affected the general economic climate in the region. While acknowledging that certain superfluous interruptions such as political instability are likely to deter steady growth, the report concedes that some of the sectors, such as banking, are likely to stay afloat for longer. Of particular interest in this regard is the MENAP oil-exporting the state of Iran. Here, there was an evident shift in budgetary allocations marked with increases in non-oil taxes and an unprecedented effort towards containing government expenditure (Beaumont et al. 2016). It is apparent that this shift may have been necessitated by the state’s banking industry, which holds a favorable liquidity ratio in very high regard.
The report speculates that Iran was one of the states that stood the most significant risk of economic turmoil. The threats facing Iran are somewhat classic, foreseeable, and may culminate in the outright annihilation of the Iranian currency from the international markets.

In a bid at eluding this eventuality, the Iranian administration has proposed internationally effective options for recovery such as depreciating the official exchange rate, which will have the consequential impact of stabilizing the currency. The risk is primarily attributable to unjustifiable government spending, especially on unproductive non-oil ventures and unwarranted subsidies. This implies the depletion of unrenewable natural oil resources, without paying due regard to the future of the venture (Legrenzi, 2016). Further, the greater risk, of the devaluation of petroleum products, is mostly the undoing of unscrupulous trading by the producers, which has resulted in excess in supply and placing the industry at the mercy of market forces.

References
Beaumont, P., Blake, G., & Wagstaff, J. M. (2016). The Middle East: A Geographical Study. Routledge.
Legrenzi, M. (2016). Beyond Regionalism?: regional cooperation, regionalism, and regionalization in the Middle East. Routledge.