Iraq Economic Forecast

Iraq Economic Outlook

July 3, 2018

Political uncertainty following the May election has yet to come to an end, although some progress was made in late June when victor Muqtada al-Sadr—who opposes U.S. and Iranian influence in the country—and the incumbent Prime Minister Haider al-Abadi announced an alliance as part of efforts to form a new government. Al-Sadr has called for the formation of a national unity government, and earlier in the month announced an alliance with Hadi al-Amiri’s Iran-linked Fatah Alliance, which had previously voiced opposition to al-Abadi remaining prime minister. However, manual recounting problematic ballots from the election started on 2 July, delaying the formation of a government.

Iraq Economic Growth

Since the defeat of the Islamic State, security conditions have improved, which, together with higher oil prices, should support economic activity this year. The large fiscal deficit and the potentially long process of government formation remain downside risks. FocusEconomics panelists expect growth of 2.3% in 2018, unchanged from last month’s forecast, and 3.9% in 2019.

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 %Jul 17

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