Iraq Economic Forecast

Iraq Economic Outlook

November 3, 2020

The economy shrank 11.7% in the second quarter according to recent data, on sharp downturns in both the oil and non-oil sectors. The contraction in Q3 was likely also marked. EIA figures show oil output collapsed in the period, as Iraq raised its compliance with OPEC+ cuts, while the non-oil sector was likely hampered by lingering Covid-19 restrictions and security concerns. Heading into the final quarter, the non-oil sector should be supported by the recent opening of many public venues and the end of the nighttime curfew. In politics, the government presented a three-year reform plan in October, which will aim to constrain spending and diversify away from oil to address the dire fiscal predicament. However, execution of the plan could be difficult due to the fractured political situation.

Iraq Economic Growth

The economy is expected to return to growth next year as the energy sector recovers and the impact of the virus likely ebbs. Risks stem from further social unrest, Iran–U.S. tensions and prolonged low oil prices pressuring the already vulnerable fiscal position. Our panelists forecast growth of 4.2% in 2021, which is unchanged from last month’s estimate, before growth of 4.7% in 2022.

Iraq Economy Data

2015 2016 2017 2018 2019
Population (million)35.236.237.138.139.1
GDP per capita (USD)4,6774,6065,1335,5715,636
GDP (USD bn)165167191212220
Economic Growth (GDP, annual variation in %)2.613.8-3.80.94.4
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 %)1.40.50.10.4-0.2
Policy Interest Rate (%)6.004.004.004.004.00
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)-1.71.37.816.27.1
Current Account Balance (USD bn)-2.82.214.934.415.8
Trade Balance (USD billion)11.012.225.447.532.2
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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