Iraq Economy

IRAQ

Iraq Economy – overview:

Iraq’s GDP growth slowed to 1.1% in 2017, a marked decline compared to the previous two years as domestic consumption and investment fell because of civil violence and a sluggish oil market. The Iraqi Government received its third tranche of funding from its 2016 Stand-By Arrangement (SBA) with the IMF in August 2017, which is intended to stabilize its finances by encouraging improved fiscal management, needed economic reform, and expenditure reduction. Additionally, in late 2017 Iraq received more than $1.4 billion in financing from international lenders, part of which was generated by issuing a $1 billion bond for reconstruction and rehabilitation in areas liberated from ISIL. Investment and key sector diversification are crucial components to Iraq’s long-term economic development and require a strengthened business climate with enhanced legal and regulatory oversight to bolster private-sector engagement. The overall standard of living depends on global oil prices, the central government passage of major policy reforms, a stable security environment post-ISIS, and the resolution of civil discord with the Kurdish Regional Government (KRG).

Iraq’s largely state-run economy is dominated by the oil sector, which provides roughly 85% of government revenue and 80% of foreign exchange earnings, and is a major determinant of the economy’s fortunes. Iraq’s contracts with major oil companies have the potential to further expand oil exports and revenues, but Iraq will need to make significant upgrades to its oil processing, pipeline, and export infrastructure to enable these deals to reach their economic potential.

In 2017, Iraqi oil exports from northern fields were disrupted following a KRG referendum that resulted in the Iraqi Government reasserting federal control over disputed oil fields and energy infrastructure in Kirkuk. The Iraqi government and the KRG dispute the role of federal and regional authorities in the development and export of natural resources. In 2007, the KRG passed an oil law to develop IKR oil and gas reserves independent of the federal government. The KRG has signed about 50 contracts with foreign energy companies to develop its reserves, some of which lie in territories taken by Baghdad in October 2017. The KRG is able to unilaterally export oil from the fields it retains control of through its own pipeline to Turkey, which Baghdad claims is illegal. In the absence of a national hydrocarbons law, the two sides have entered into five provisional oil- and revenue-sharing deals since 2009, all of which collapsed.

Iraq is making slow progress enacting laws and developing the institutions needed to implement economic policy, and political reforms are still needed to assuage investors’ concerns regarding the uncertain business climate. The Government of Iraq is eager to attract additional foreign direct investment, but it faces a number of obstacles, including a tenuous political system and concerns about security and societal stability. Rampant corruption, outdated infrastructure, insufficient essential services, skilled labor shortages, and antiquated commercial laws stifle investment and continue to constrain growth of private, nonoil sectors. Under the Iraqi constitution, some competencies relevant to the overall investment climate are either shared by the federal government and the regions or are devolved entirely to local governments. Investment in the IKR operates within the framework of the Kurdistan Region Investment Law (Law 4 of 2006) and the Kurdistan Board of Investment, which is designed to provide incentives to help economic development in areas under the authority of the KRG.

Inflation has remained under control since 2006. However, Iraqi leaders remain hard-pressed to translate macroeconomic gains into an improved standard of living for the Iraqi populace. Unemployment remains a problem throughout the country despite a bloated public sector. Overregulation has made it difficult for Iraqi citizens and foreign investors to start new businesses. Corruption and lack of economic reforms – such as restructuring banks and developing the private sector – have inhibited the growth of the private sector.

Iraq GDP (purchasing power parity):

$649.3 billion (2017 est.)

$662.9 billion (2016 est.)

$586.3 billion (2015 est.)

note: data are in 2017 dollars

country comparison to the world: 34

Iraq GDP (official exchange rate):

$192.4 billion (2017 est.)

Iraq GDP – real growth rate:

-2.1% (2017 est.)

13.1% (2016 est.)

2.5% (2015 est.)

country comparison to the world: 206

Iraq GDP – per capita (PPP):

$16,700 (2017 est.)

$17,500 (2016 est.)

$15,900 (2015 est.)

note: data are in 2017 dollars

country comparison to the world: 107

Iraq Gross national saving:

19% of GDP (2017 est.)

13.1% of GDP (2016 est.)

18.4% of GDP (2015 est.)

country comparison to the world: 103

Iraq GDP – composition, by end use:

household consumption: 50.4% (2013 est.)

government consumption: 22.9% (2016 est.)

investment in fixed capital: 20.6% (2016 est.)

investment in inventories: 0% (2016 est.)

exports of goods and services: 32.5% (2016 est.)

imports of goods and services: -40.9% (2016 est.)

Iraq GDP – composition, by sector of origin:

agriculture: 3.3% (2017 est.)

industry: 51% (2017 est.)

services: 45.8% (2017 est.)

Iraq Agriculture – products:

wheat, barley, rice, vegetables, dates, cotton; cattle, sheep, poultry

Iraq Industries:

petroleum, chemicals, textiles, leather, construction materials, food processing, fertilizer, metal fabrication/processing

Iraq Industrial production growth rate:

0.7% (2017 est.)

country comparison to the world: 163

Iraq Labor force:

8.9 million (2010 est.)

country comparison to the world: 57

Iraq Labor force – by occupation:

agriculture: 21.6%

industry: 18.7%

services: 59.8% (2008 est.)

Iraq Unemployment rate:

16% (2012 est.)

15% (2010 est.)

country comparison to the world: 175

Iraq Population below poverty line:

23% (2014 est.)

Iraq Household income or consumption by percentage share:

lowest 10%: 3.6%

highest 10%: 25.7% (2007 est.)

Iraq Budget:

revenues: 68.71 billion (2017 est.)

expenditures: 76.82 billion (2017 est.)

Iraq Taxes and other revenues:

35.7% (of GDP) (2017 est.)

country comparison to the world: 59

Iraq Budget surplus (+) or deficit (-):

-4.2% (of GDP) (2017 est.)

country comparison to the world: 160

Iraq Public debt:

59.7% of GDP (2017 est.)

66% of GDP (2016 est.)

country comparison to the world: 74

Iraq Fiscal year:

calendar year

Iraq Inflation rate (consumer prices):

0.1% (2017 est.)

0.5% (2016 est.)

country comparison to the world: 14

Iraq Central bank discount rate:

6% (2016)

6% (2015)

country comparison to the world: 70

Iraq Commercial bank prime lending rate:

12.7% (31 December 2017 est.)

12.7% (31 December 2016 est.)

country comparison to the world: 65

Iraq Stock of narrow money:

$60.1 billion (31 December 2017 est.)

$59.84 billion (31 December 2016 est.)

country comparison to the world: 50

Iraq Stock of broad money:

$60.1 billion (31 December 2017 est.)

$59.84 billion (31 December 2016 est.)

country comparison to the world: 50

Iraq Stock of domestic credit:

$34.61 billion (31 December 2017 est.)

$31.93 billion (31 December 2016 est.)

country comparison to the world: 76

Iraq Market value of publicly traded shares:

$4 billion (9 December 2011)

$2.6 billion (31 July 2010)

$2 billion (31 July 2009 est.)

country comparison to the world: 89

Iraq Current account balance:

$4.344 billion (2017 est.)

-$13.38 billion (2016 est.)

country comparison to the world: 31

Iraq Exports:

$61.4 billion (2017 est.)

$41.72 billion (2016 est.)

country comparison to the world: 46

Iraq Exports – partners:

India 21.2%, China 20.2%, US 15.8%, South Korea 9.4%, Greece 5.3%, Netherlands 4.8%, Italy 4.7% (2017)

Iraq Exports – commodities:

crude oil 99%, crude materials excluding fuels, food, live animals

Iraq Imports:

$39.47 billion (2017 est.)

$19.57 billion (2016 est.)

country comparison to the world: 61

Iraq Imports – commodities:

food, medicine, manufactures

Iraq Imports – partners:

Turkey 27.8%, China 25.7%, South Korea 4.7%, Russia 4.3% (2017)

Iraq Reserves of foreign exchange and gold:

$48.88 billion (31 December 2017 est.)

$45.36 billion (31 December 2016 est.)

country comparison to the world: 41

Iraq Debt – external:

$73.02 billion (31 December 2017 est.)

$64.16 billion (31 December 2016 est.)

country comparison to the world: 59

Iraq Stock of direct foreign investment – at home:

$26.63 billion (2015 est.)

$23.16 billion (2014 est.)

country comparison to the world: 74

Iraq Stock of direct foreign investment – abroad:

$2.109 billion (2015 est.)

$1.956 billion (2014 est.)

country comparison to the world: 82

Iraq Iraqi dinars (IQD) per US dollar –

1,184 (2017 est.)

1,182 (2016 est.)

1,182 (2015 est.)

1,167.63 (2014 est.)

1,213.72 (2013 est.)


Data for Educational Purpose Only.

Source: 

The World Factbook 2016-17. Washington, DC: Central Intelligence Agency, 2016.

https://www.cia.gov/library/publications/the-world-factbook/index.html


Other Pages Relating to Country Iraq:

Iraq at a Glance and One Page Summary

Iraq Background and Introduction

Iraq Geography

Iraq People and Society

Iraq Government

Iraq Economy

Iraq Energy Resources

Iraq Communications System

Iraq Transportation System

Iraq Military and Security System

Iraq Transnational Issues

Iraq Capital Flag and Currency

Go to All Country Index


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