In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response
Iraq's gradually rebounding economy was severely hit by Covid-19, weighing on domestic demand and macroeconomic balances, as well as lower global oil prices and OPEC output quotas. GDP contracted to an estimated 15.7% in 2020 - by far the lowest performance since 2003 - but grew back to 7.7% in 2021 and 7% in 2022, a recovery to pre-pandemic levels. Buoyed by rises in public expenditure and robust agricultural output, real non-oil GDP is projected to have expanded by 6% in 2023 following a stagnant performance in 2022 (IMF). However, the overall GDP growth rate was negative by an estimated 2.7%. The momentum of non-oil growth is expected to persist into 2024, but substantial declines in oil prices or prolonged OPEC+ cuts could exert pressure on fiscal and external accounts. Looking ahead, over the medium term, non-oil growth is forecasted to stabilize around 2.5% due to prevailing obstacles to private sector development. The IMF projects overall growth at 2.9% this year and 4% in 2025.
Concerning public finances, although the expansionary budget was under-executed due to delayed Parliamentary approval, the fiscal balance still declined from a surplus of 10.8% of GDP in 2022 to a deficit of 1.3% in 2023, due to lower oil revenues and an increase in expenditures by 8 percentage points of GDP, of which salaries and pensions contributed 5 percentage points as the authorities started hiring in line with the budget law. Absent new policy measures, the fiscal deficit is expected to reach 7.6% in 2024 and widen further thereafter as oil prices are projected to gradually decline over the medium term. As a consequence, public debt would almost double from 44% in 2023 to 86% by 2029 (IMF). Achieving an ambitious fiscal adjustment is imperative to stabilize debt in the medium term and to rebuild fiscal buffers, all while safeguarding essential capital spending. Additionally, the authorities should focus on enhancing public financial management and mitigating fiscal risks. Headline inflation dropped from a peak of 7.5% in January 2023 to 4% by the end of the year, driven by reduced international food and energy prices, alongside the effects of the February 2023 currency revaluation. The current account is anticipated to have registered a surplus of 2.6% of GDP, with international reserves climbing to USD 112 billion. According to the IMF recommendations, Iraq requires higher and more sustainable non-oil growth to accommodate the rapidly expanding labor force, boost non-oil exports and government revenue, and mitigate the economy's susceptibility to oil price fluctuations. Key reform priorities encompass adopting a comprehensive employment strategy, expediting financial sector reform to enhance credit accessibility, implementing a thorough pension reform, combating corruption, improving governance, and eliminating other barriers hindering private sector development.
According to the World Bank, the unemployment rate stood at 15.3% in 2022 (latest data available). As per the Ministry of Planning, the poverty rate in the country has escalated to 25%, marking an uptick of approximately three percentage points from the pre-pandemic level. The country has a low GDP per capita, estimated at USD 10,865 in 2022 by the World Bank (PPP).
Main Indicators | 2022 | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) |
---|---|---|---|---|---|
GDP (billions USD) | 261.37 | 254.42 | 265.89 | 278.81 | 292.15 |
GDP (Constant Prices, Annual % Change) | 7.0 | -2.2 | 1.4 | 5.3 | 3.8 |
GDP per Capita (USD) | 6,187 | 5,870 | 5,979 | 6,111 | 6,241 |
General Government Gross Debt (in % of GDP) | 43.3 | 44.2 | 48.2 | 54.6 | 62.3 |
Inflation Rate (%) | 5.0 | 4.4 | 4.0 | 4.0 | 3.8 |
Current Account (billions USD) | 43.91 | 6.59 | -9.55 | -14.09 | -19.57 |
Current Account (in % of GDP) | 16.8 | 2.6 | -3.6 | -5.1 | -6.7 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Iraq's 45.5 million population includes a workforce of 11.3 million. The agricultural sector accounts for only 2.9% of GDP and employs around 8% of the labor force (World Bank, latest data available), due to the prevalence of less modern and productive methods. About a quarter of the total land area is suitable for intensive cultivation and animal husbandry. Most of the agricultural activity is concentrated in the fertile lowlands in the Mesopotamian plains that are irrigated from the Tigris and the Euphrates, and include cereals, pulses, and dates. Nonetheless, Iraq is still a net food importer.
Industry accounts for 62.7% of GDP and employs 28% of the workforce (World Bank). Its relative share in the economy continues to pick up after hitting a 30-year low in 2015 but remains much lower than levels seen in the early 2000s. Iraq's largely state-run economy is dominated by the oil sector, which provides roughly 90% of government revenue and 80% of foreign exchange earnings (OPEC). The manufacturing sector as a whole is estimated to account for only 2% of the country’s GDP. Iraq’s public sector manufacturing output reached an estimated value of USD 1 billion in 2023, according to the country’s industry minister.
The services sector is estimated to constitute 34.8% of Iraq's GDP and employs 64% of the workforce (World Bank). Iraq is one of the Middle East's most underbanked countries, but the banking sector, which is still mostly state-owned, is taking significant steps toward financial inclusion thanks to a new electronic payments system to disburse government salaries and welfare to some seven million citizens. The public sector holds significant dominance in Iraq's retail industry, particularly in the realm of food products.
Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
---|---|---|---|
Employment By Sector (in % of Total Employment) | 19.8 | 21.3 | 58.9 |
Value Added (in % of GDP) | 2.9 | 62.7 | 34.8 |
Value Added (Annual % Change) | -10.6 | 11.2 | 1.1 |
Source: World Bank - Latest available data.
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Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
Iraqi Dinar (IQD) - Average Annual Exchange Rate For 1 MUR | 33.26 | 34.34 | 34.85 | 0.03 | 30.29 |
Source: World Bank - Latest available data.
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Iraq, the world´s fifth biggest producer and fourth largest exporter of oil, is relatively open to foreign trade, which represents around 62% of the country's GDP (World Bank, latest data available). The Iraqi government’s new trade policy aims to integrate the country’s economy into regional and international markets and consequently the country has very few trade barriers. Crude oil accounts for more than 95% of Iraqi exports whereas petroleum products make up for the rest. Iraq's primary imports include refined petroleum, broadcasting equipment, cars, jewellery, and rolled tobacco (data OEC, 2022).
According to OEC, the country’s main export partners in 2022 were India (USD 38.8 billion), China (USD 34 billion), United States (USD 10.3 billion), South Korea (USD 8.21 billion), and Greece (USD 6.27 billion); whereas imports came chiefly from the United Arab Emirates (USD 21.2 billion), China (USD 14B), Turkey (USD 13.7 billion), India (USD 2.45 billion), and South Korea (USD 1.15 billion). The Iraqi government implemented new laws to strengthen trade and has more recently sought to build a highway between Baghdad and Cairo via Amman to boost trade relations between Iraq, Egypt and Jordan. Iraq has also invested in strengthening its hydrocarbon export capacity, primarily by building a port located in the Persian Gulf. However, insecurity, high levels of corruption, fragile institutions, lack of legal protections and poorly implemented structural reforms discourage foreign trade.
The country maintains a structural trade surplus for merchandise, largely attributed to its hydrocarbon exports; nevertheless, it remains highly vulnerable to oil price volatility. In 2022, Iraq exported a total of USD 123 billion against USD 67.1 billion in imports (data OEC).
Foreign Trade Indicators | 2019 | 2020 | 2021 | 2022 | 2023 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 72,283 | 54,722 | 50,707 | 87,216 | 95,519 |
Exports of Goods (million USD) | 88,903 | 50,613 | 91,514 | 138,291 | 115,952 |
Imports of Services (million USD) | 22,865 | 13,816 | 15,986 | 22,247 | 0 |
Exports of Services (million USD) | 7,318 | 3,803 | 5,177 | 9,034 | 0 |
Imports of Goods and Services (Annual % Change) | 28.4 | -23.9 | 7.7 | n/a | n/a |
Exports of Goods and Services (Annual % Change) | 4.6 | -10.1 | -13.3 | n/a | n/a |
Imports of Goods and Services (in % of GDP) | 30.9 | 30.0 | 24.4 | n/a | n/a |
Exports of Goods and Services (in % of GDP) | 38.1 | 27.8 | 37.7 | n/a | n/a |
Trade Balance (million USD) | 32,168 | 5,902 | 38,363 | n/a | n/a |
Trade Balance (Including Service) (million USD) | 16,620 | -4,090 | 27,554 | n/a | n/a |
Foreign Trade (in % of GDP) | 69.0 | 57.7 | 62.1 | n/a | n/a |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
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5.2 bn USD of services exported in 2021 | |
---|---|
38.03% | |
Personal travelPersonal travel | 38.03% |
25.08% | |
13.74% | |
8.63% | |
7.16% | |
3.67% | |
3.37% | |
0.14% | |
0.10% | |
0.07% |
16.0 bn USD of services imported in 2021 | |
---|---|
46.62% | |
Personal travelPersonal travel | 46.59% |
Business travelBusiness travel | 0.04% |
29.65% | |
10.33% | |
5.71% | |
4.74% | |
2.10% | |
0.79% | |
0.03% | |
0.03% |
Source: United Nations Statistics Division, Latest Available Data
Other smaller, religious, local, tribal and minority parties represented in the parliament are:
- Emtidad
- NGM
- Independents
- Kurdistan Alliance
- Azem Alliance
- ANSF
- National Contract
- Tasmim Alliance
- Ishraqat Kanoon
- Rights Movement
- National Approach
- Babylon Movement
- Our People Are Our Identity
- Al Furatain Party
- Decisive Reform.
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: April 2024