Iraq Economic Forecast

Iraq Economic Outlook

September 7, 2021

After shrinking in annual terms in Q1 on a sharp decline in oil output, the economy should have fared somewhat better in Q2, with the downturn in the energy sector likely easing thanks to a more favorable base of comparison, and higher oil prices boosting government revenue. However, momentum in the non-energy sector was likely curtailed by elevated insecurity, the tightening of restrictions in May and electricity shortages towards the end of the quarter. Heading into Q3, the oil sector is strengthening. Crude output was up markedly year-on-year in July, while oil exports rose in August amid OPEC+’s decision to loosen production limits. However, ongoing Covid-19 restrictions and terrorist attacks on the electricity network are likely restraining activity in the non-oil sector.

Iraq Economic Growth

Economic growth should return this year thanks to the spillover from higher oil prices. However, the recovery will be tepid, curtailed by lower average oil output than last year and a weak business environment. Risks stem from possible further social unrest—particularly in the run-up to the October elections—and potential instability as the U.S. withdraws its troops. Our panelists forecast growth of 1.9% in 2021, which is unchanged from last month’s estimate, before growth of 5.1% in 2022.

Iraq Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (USD)4,6774,6065,1335,5715,636
GDP (USD bn)165167191212220
Economic Growth (GDP, annual variation in %)2.613.8-
Industrial Production (annual variation in %)22.28.0-  -  -  
Unemployment Rate10.710.813.012.912.8
Fiscal Balance (% of GDP)-12.8-13.9-1.67.9-  
Public Debt (% of GDP)56.964.358.949.3-  
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
Exchange Rate (vs USD)1,0961,1821,1851,1931,194
Exchange Rate (vs USD, aop)1,1481,1711,1771,1921,193
Current Account (% of GDP)-
Current Account Balance (USD bn)-
Trade Balance (USD billion)
Exports (USD billion)51.341.357.686.481.6
Imports (USD billion)40.329.132.238.949.4
Exports (annual variation in %)-39.9-19.639.450.0-5.5
Imports (annual variation in %)-19.0-27.910.720.827.1
International Reserves (USD)50.942.045.660.8-  
External Debt (% of GDP)38.639.436.4-  -  

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Iraq Facts

Value Change Date
Exchange Rate1,1940.0 %Jan 01

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