Iraq Economic Forecast

Iraq Economic Outlook

February 6, 2018

The economy is slowly recovering from years of civil war, unrest in the Kurdish region and low oil prices. However, political unrest remains high. Parliament failed to pass its annual budget on 31 January as Kurdish and Sunni lawmakers skipped the session, claiming the budget favors Iraq’s Shia regions. This impasse is poorly timed for Prime Minister Haider al-Abadi, who saw his popularity rising after his victory over both the Islamic State (ISIL) and Kurdish ambitions for statehood. While his party is still well positioned to win the crucial general election on 12 May, al-Abadi will likely fall short of a majority and will need to form a government with political rivals.

Iraq Economic Growth

Economic growth should accelerate notably this year due to higher oil prices and the peace dividend stemming from the near-annihilation of ISIL in Iraq. However, sectarian tensions are resurfacing ahead of the May elections, and large economic imbalances will prevent a sharp recovery. FocusEconomics Consensus Forecast panelists see growth of 2.1% in 2018, which is down 0.4 percentage points from last month’s projection. In 2019, they see growth at 3.9%.

Iraq Economy Data

20122013201420152016
Population (million)32.633.434.335.236.1
GDP per capita (USD)6,6937,0226,8464,676-  
GDP (USD bn)218235235164-  
Economic Growth (GDP, annual variation in %)12.65.6-3.9-2.4-  
Industrial Production (annual variation in %)12.05.06.722.28.0
Unemployment Rate15.315.115.015.516.1
Fiscal Balance (% of GDP)4.1-5.8-5.3-12.3-  
Public Debt (% of GDP)34.831.231.855.0-  
Inflation Rate (CPI, annual variation in %)6.11.92.21.40.6
Policy Interest Rate (%)6.006.006.006.004.00
Exchange Rate (vs USD)1,1641,1651,1431,0961,182
Exchange Rate (vs USD, aop)1,1641,1631,1631,1481,171
Current Account (% of GDP)13.59.610.42.5-  
Current Account Balance (USD bn)29.522.624.44.1-  
Trade Balance (USD billion)35.230.430.810.2-  
Exports (USD billion)94.289.884.043.4-  
Imports (USD billion)59.059.353.233.2-  
Exports (annual variation in %)18.2-4.7-6.4-48.3-  
Imports (annual variation in %)23.40.6-10.4-37.6-  
International Reserves (USD)70.377.766.451.142.2
External Debt (% of GDP)27.725.324.540.8-  

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Iraq Facts

ValueChangeDate
Exchange Rate1,1920.0 %Feb 21

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