Building in Iraq

Iraq Economic Forecast

Iraq Economic Outlook

Economic momentum is likely waning so far this year. Oil production flatlined in annual terms in January–April, weighed on by OPEC+ cuts and the suspension of 450,000 barrels per day of crude flows to Turkey in March. Tougher OPEC+ output curtailments from May will be further dampening the energy sector in the remainder of Q2. In addition, a dollar shortage has harmed the non-oil sector. In politics, the expansionary 2023–2025 budget presented in March has still not been approved by Parliament due to disagreements between Kurdish and Iraqi parties. This lack of approval will be capping government spending. Moreover, strained relations between Kurdistan and the federal government could complicate the resumption of oil exports to Turkey, hitting the external sector.

Iraq Inflation

Inflation fell to 5.3% in March from 6.9% in February. Inflation should average lower in 2023 than in 2022 on easing external price pressures and the re-pegging of the dinar at a stronger rate. Key upside risks are the depreciation of the black-market FX rate and fiscal stimulus following the eventual approval of the budget.

This chart displays Economic Growth (GDP, annual variation in %) for Iraq from 2013 to 2022.

Iraq Economic Data

2017 2018 2019 2020 2021
Population (million) 37.1 38.1 39.1 40.1 41.2
GDP (USD bn) 189 226 232 180 206
GDP per capita (USD) 5,076 5,939 5,931 4,492 5,011
GDP (IQD bn) 221,666 268,919 276,158 215,662 301,153
Economic Growth (Nominal GDP, ann. var. %) 12.6 21.3 2.7 -21.9 39.6
Economic Growth (GDP, ann. var. %) -1.8 2.6 5.5 -12.0 1.6
Oil Production (mn barrels per day, aop) 4.44 4.55 4.68 4.05 4.02
Unemployment (% of active population, aop) 13.0 14.1 15.1 16.2 16.2
Fiscal Balance (% of GDP) -1.5 7.8 0.8 -13.9 -0.4
Public Debt (% of GDP) 59.1 47.8 45.1 84.3 59.2
Money (ann. var. of M2 %) 2.6 2.7 8.4 15.9 16.7
Inflation (CPI, ann. var. %, aop) 0.2 0.4 -0.2 0.6 6.0
CBI Policy Rate (%, eop) 4.00 4.00 4.00 4.00 4.00
Exchange Rate (IQD per USD, eop) 1,184 1,190 1,190 1,461 1,460
Exchange Rate (IQD per USD, aop) 1,176 1,188 1,190 1,196 1,460
Current Account Balance (USD bn) 14.9 34.4 15.8 -6.2 24.6
Current Account Balance (% of GDP) 7.9 15.2 6.8 -3.4 11.9
Merchandise Trade Balance (USD bn) 25.4 47.5 32.2 5.9 38.4
Merchandise Exports (USD bn) 57.6 86.4 81.6 46.8 73.1
Merchandise Imports (USD bn) 32.2 38.9 49.4 40.9 34.7
Merchandise Exports (ann. var. %) 39.4 50.0 -5.5 -42.6 56.1
Merchandise Imports (ann. var. %) 10.7 20.8 27.1 -17.2 -15.2
Foreign Direct Investment (USD bn) -5.0 -4.9 -3.5 -2.9 -2.6
International Reserves (USD bn) 45.6 60.8 63.3 48.6 58.6
International Reserves (months of imports) 17.0 18.8 15.4 14.2 20.2

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