Building in Iraq

Iraq Economic Forecast

Iraq Economic Outlook

Iraq has likely seen meager GDP growth so far this year, with the economy operating at two different speeds. On one side, OPEC+ quota restrictions and the ongoing closure of an oil pipeline to Turkey are hampering the energy sector; oil output fell year on year for the seventh straight month in October. On the other hand, the non-oil economy should be performing fairly well despite the hike in the Central Bank’s policy rate and restrictions on commercial banks’ access to dollars. Agricultural activity likely benefited early in 2023 from a good rainy season. Moreover, construction activity, investment and private consumption should be getting a boost from relative political calm and greater fiscal spending following the approval of the expansionary 2023–2025 budget in June.

Iraq Inflation

Inflation rose to 3.7% in August (July: 3.5%) and could rise further later in 2023 due to a weak parallel-market dinar, the expansionary budget and higher energy prices. In 2024, inflation is forecast to average slightly below its August level on lower average commodity prices. Volatility in the parallel FX market and changes to the currency peg are risks in both directions.

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

Iraq Economic Data

2018 2019 2020 2021 2022
Population (million) 38.1 39.1 40.1 41.2 42.2
GDP (USD bn) 226 232 180 206 262
GDP per capita (USD) 5,939 5,931 4,492 5,011 6,213
GDP (IQD bn) 268,919 276,158 215,662 301,153 383,064
Economic Growth (Nominal GDP, ann. var. %) 21.3 2.7 -21.9 39.6 27.2
Economic Growth (GDP, ann. var. %) 2.6 5.5 -12.0 1.6 7.0
Oil Production (mn barrels per day, aop) 4.55 4.68 4.05 4.02 4.44
Unemployment (% of active population, aop) 14.1 15.1 16.2 16.2 15.5
Fiscal Balance (% of GDP) 7.8 0.8 -12.9 -0.4 7.6
Public Debt (% of GDP) 47.8 45.4 78.7 59.2 44.9
Money (ann. var. of M2 %) 2.7 8.4 15.9 16.7 20.3
Inflation (CPI, ann. var. %, aop) 0.4 -0.2 0.6 6.0 5.0
CBI Policy Rate (%, eop) 4.00 4.00 4.00 4.00 4.00
Exchange Rate (IQD per USD, eop) 1,190 1,190 1,461 1,460 1,460
Exchange Rate (IQD per USD, aop) 1,188 1,190 1,196 1,460 1,460
Current Account Balance (USD bn) 34.4 15.8 -6.3 24.6 58.0
Current Account Balance (% of GDP) 15.2 6.8 -3.5 11.9 22.1
Merchandise Trade Balance (USD bn) 47.5 32.2 5.8 38.4 71.1
Merchandise Exports (USD bn) 86.4 81.6 46.9 73.1 118.0
Merchandise Imports (USD bn) 38.9 49.4 41.0 34.7 46.9
Merchandise Exports (ann. var. %) 50.0 -5.5 -42.6 56.0 61.5
Merchandise Imports (ann. var. %) 20.8 27.1 -16.9 -15.4 35.1
Foreign Direct Investment (USD bn) -4.9 -3.5 -2.9 -2.6 -2.1
International Reserves (USD bn) 60.8 63.3 48.6 58.6 89.4
International Reserves (months of imports) 18.8 15.4 14.2 20.2 22.9

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