Iraq Economic Forecast

Iraq Economic Outlook

April 2, 2019

The economy contracted in 2018 according to recent preliminary data from the statistical institute, on the back of a decline in the oil sector and stagnation in the non-oil sector. Looking to the first quarter of this year, Iraq’s oil production was elevated in January and February despite the introduction of OPEC-mandated production cuts. This, together with greater fiscal support as outlined in the 2019 budget, should have supported the economy. On the political front, in the autonomous region of Kurdistan the KDP and PUK parties reached a four-year political agreement in early March. That said, the two parties have yet to reach a deal to form a new government following last September’s election, with the region remaining politically hamstrung as a result.

Iraq Economic Growth

The economy should strengthen this year, underpinned by an improved security situation, reconstruction efforts and higher government spending. However, the OPEC output cuts will likely limit progress in the oil sector, while a lack of economic diversification, domestic political instability and regional geopolitical tensions pose downside risks. Our panelists expect growth of 4.4% in 2019, which is up 0.1 percentage points from last month’s estimate, and 3.4% in 2020.

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)9.611.2-1.12.1-  
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 Rate1,1910.0 %Apr 12

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