Iraq Economic Forecast

Iraq Economic Outlook

May 7, 2019

The economy has likely performed fairly well so far this year. Oil output was up markedly in annual terms in Q1, despite OPEC-mandated production cuts, while oil exports in April netted the government around USD 7 billion—the highest monthly figure so far this year—thanks to the recent uptick in oil prices. In addition, economic agreements reached in recent months with Jordan and Russia are likely supporting business confidence. This comes after preliminary data from the statistical office showed that the economy unexpectedly contracted in 2018 on the back of a decline in the oil sector and stagnation in the non-oil sector. On the political front, Saudi Arabia pledged USD 1 billion in financial support in early April and reopened a consulate in Baghdad, which bodes well for future trade ties.

Iraq Economic Growth

The economy should strengthen this year despite OPEC output cuts, thanks to an improved security situation and reconstruction efforts. However, infrastructure investment will be restrained somewhat by the 2019 budget’s focus on current spending. Domestic political instability and regional geopolitical tensions pose downside risks. Our panelists expect growth of 4.1% in 2019, which is down 0.3 percentage points from last month’s estimate, and 4.1% again in 2020.

Iraq Economy Data

20132014201520162017
Population (million)33.436.036.937.938.9
GDP per capita (USD)7,0426,6214,8514,548-  
GDP (USD bn)235238179172-  
Economic Growth (GDP, annual variation in %)6.60.74.811.0-  
Industrial Production (annual variation in %)5.06.722.28.0-  
Unemployment Rate7.97.67.78.08.2
Fiscal Balance (% of GDP)-5.8-5.4-12.3-13.9-  
Public Debt (% of GDP)31.232.055.164.4-  
Inflation Rate (CPI, annual variation in %)1.92.21.40.40.2
Policy Interest Rate (%)6.006.006.004.004.00
Exchange Rate (vs USD)1,1651,1431,0961,1821,185
Exchange Rate (vs USD, aop)1,1631,1631,1481,1711,177
Current Account (% of GDP)9.610.2-1.12.1-  
Current Account Balance (USD bn)22.624.4-1.93.6-  
Trade Balance (USD billion)30.426.83.37.118.8
Exports (USD billion)89.885.451.341.357.6
Imports (USD billion)60.154.448.034.338.8
Exports (annual variation in %)-4.7-4.9-39.9-19.539.4
Imports (annual variation in %)0.6-1.3-18.1-28.713.3
International Reserves (USD)77.766.353.544.948.9
External Debt (% of GDP)25.224.436.939.2-  

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Iraq Facts

ValueChangeDate
Exchange Rate1,1930.0 %May 13

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