Iraq Economic Outlook
May 12, 2020
The economy is in dire straits. Oil production was down sharply year-on-year in Q1 and, as part of April’s OPEC+ deal, Iraq has committed to reducing output substantially going forward. Moreover, oil prices are at historically low levels as Covid-19 hits demand. The combination of lower output and prices bodes poorly for the crucial energy sector and is crushing government revenues—roughly 90% of which come from oil. Compounding matters, domestic containment measures—although they have been eased in recent weeks—are hurting the non-oil sector and pose risks to social stability. In politics, following over five months of paralysis, intelligence chief Mustafa al-Kadhimi took office as prime minister in early May. While this reduces political uncertainty somewhat, institutional capacity is likely to remain weak and Parliament is still fractured, as evidenced by the initial rejection of several of Kadhimi’s ministerial picks.Iraq Economic Growth
The economy is seen contracting sharply this year due to a weaker energy sector and containment measures. Risks are skewed to the downside, and stem from a possible resurgence of social unrest, Iran-U.S. tensions and a potential worsening of the viral outbreak. Our panelists forecast a contraction of 4.3% in 2020, which is down 5.5 percentage points from last month’s estimate, and growth of 4.0% in 2021.Iraq Economy Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Population (million) | 35.2 | 36.2 | 37.1 | 38.1 | 39.1 |
| GDP per capita (USD) | 4,677 | 4,606 | 5,133 | 5,571 | 5,636 |
| GDP (USD bn) | 165 | 167 | 191 | 212 | 220 |
| Economic Growth (GDP, annual variation in %) | 2.6 | 13.8 | -3.8 | 0.9 | 4.4 |
| Industrial Production (annual variation in %) | 22.2 | 8.0 | - | - | - |
| Unemployment Rate | 10.7 | 10.8 | 13.0 | 12.9 | 12.8 |
| Fiscal Balance (% of GDP) | -12.8 | -13.9 | -1.6 | 7.9 | - |
| Public Debt (% of GDP) | 56.9 | 64.3 | 58.9 | 49.3 | - |
| Inflation Rate (CPI, annual variation in %) | 1.4 | 0.5 | 0.1 | 0.4 | -0.2 |
| Policy Interest Rate (%) | 6.00 | 4.00 | 4.00 | 4.00 | 4.00 |
| Exchange Rate (vs USD) | 1,096 | 1,182 | 1,185 | 1,193 | 1,194 |
| Exchange Rate (vs USD, aop) | 1,148 | 1,171 | 1,177 | 1,192 | 1,193 |
| Current Account (% of GDP) | -1.7 | 1.3 | 7.8 | 16.2 | 7.1 |
| Current Account Balance (USD bn) | -2.8 | 2.2 | 14.9 | 34.4 | 15.8 |
| Trade Balance (USD billion) | 11.0 | 12.2 | 25.4 | 47.5 | 32.2 |
| Exports (USD billion) | 51.3 | 41.3 | 57.6 | 86.4 | 81.6 |
| Imports (USD billion) | 40.3 | 29.1 | 32.2 | 38.9 | 49.4 |
| Exports (annual variation in %) | -39.9 | -19.6 | 39.4 | 50.0 | -5.5 |
| Imports (annual variation in %) | -19.0 | -27.9 | 10.7 | 20.8 | 27.1 |
| International Reserves (USD) | 50.9 | 42.0 | 45.6 | 60.8 | - |
| External Debt (% of GDP) | 38.6 | 39.4 | 36.4 | - | - |
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Iraq Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 1,194 | 0.0 % | Jan 01 |
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