Iraq Economic Forecast

Iraq Economic Outlook

February 11, 2020

The economy likely lost steam in the fourth quarter. Oil production was down 2.4% year-on-year in the period according to EIA data, due in part to a temporary outage at the Rumaila field and as the country strengthened compliance with OPEC+ production cuts. Moreover, prolonged protests likely dented non-oil activity. This comes after a slowdown in Q3 on the back of weaker expansions in both the oil and non-oil sectors. On the political front, Mohammed Tawfiq Allawi was recently appointed as prime minister, several months after former Prime Minister Adel Abdul-Mahdi resigned over the government’s handling of the protests. Allawi must now form a cabinet and prepare for fresh elections, although a firm date for the vote has yet to be announced. The economic panorama is unlikely to change significantly, and anti-government protests look set to rumble on.

Iraq Economic Growth

Growth is seen slowing this year on deeper OPEC+ production cuts and political instability. However, some reconstruction progress and a loose fiscal stance should support momentum somewhat. Downside risks to the outlook include Iran-U.S. tensions, which could spill over into conflict on Iraqi soil, a potential spike in social unrest and volatile oil prices. Our panelists forecast growth of 3.4% in 2020, which is down 0.3 percentage points from last month’s estimate, and 3.5% in 2021.

Iraq Economy Data

2014 2015 2016 2017 2018
Population (million)35.035.236.237.138.1
GDP per capita (USD)6,7245,1274,7525,2345,880
GDP (USD bn)235181172194224
Economic Growth (GDP, annual variation in %)2.31.79.60.8-1.0
Industrial Production (annual variation in %)6.722.28.0-  -  
Unemployment Rate7.98.18.17.97.9
Fiscal Balance (% of GDP)-5.6-12.8-14.3-1.6-  
Public Debt (% of GDP)32.956.966.159.6-  
Inflation Rate (CPI, annual variation in %)2.21.40.50.10.4
Policy Interest Rate (%)6.006.004.004.004.00
Exchange Rate (vs USD)1,1431,0961,1821,1851,193
Exchange Rate (vs USD, aop)1,1631,1481,1711,1771,192
Current Account (% of GDP)2.6-6.4-7.82.1-  
Current Account Balance (USD bn)6.1-11.6-13.44.0-  
Trade Balance (USD billion)35.611.012.225.448.4
Exports (USD billion)85.451.341.357.687.3
Imports (USD billion)49.840.329.132.238.9
Exports (annual variation in %)-4.9-39.9-19.539.451.6
Imports (annual variation in %)-7.4-19.1-27.810.720.7
International Reserves (USD)62.850.942.045.660.6
External Debt (% of GDP)24.735.338.235.7-  

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Iraq Facts

Value Change Date
Exchange Rate1,1940.0 %Jan 01

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