Iraq Economic Forecast

Iraq Economic Outlook

September 8, 2020

The economy likely contracted markedly in the second quarter. Plummeting oil production, as Iraq increased its compliance with OPEC+ cuts under pressure from Saudi Arabia and Russia, weighed on the energy sector. In addition, lockdown measures and low government revenues will have hit the non-oil sector. Turning to the third quarter, activity likely remains downbeat. EIA data shows oil output down over 20% in July year-on-year, as Iraq continued to compensate for past under-compliance with OPEC+ cuts. Moreover, domestic coronavirus cases have surged, leading to sporadic government-imposed restrictions and hampering the recovery of the non-oil sector. The non-oil sector is likely being further dampened by smoldering social unrest: Recent weeks have seen protests in Kurdistan and the city of Basra.

Iraq Economic Growth

The economy is expected to shrink notably this year due to a weaker energy sector and domestic Covid-19 containment measures. Risks are skewed to the downside, stemming from further social unrest, Iran-U.S. tensions and a prolonged domestic coronavirus outbreak. Our panelists forecast a contraction of 7.2% in 2020, which is down 0.3 percentage points from last month’s estimate, and growth of 4.1% in 2021.

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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